TO-MORROW IN THE PACIFIC

Dominion, Volume 6, Issue 1855, 15 September 1913, Page 8

TO-MORROW IN THE PACIFIC

THE PANAMA CANAL. WEDDING .OF TWO OCEANS N.Z. SHIPPING TRADE. "DEALS" AND "UNDERSTANDINGS."

pany, lias been credited with disclosing important plants prematurely. At last Tuesday's important meeting of the Union S.S'. Company, held in Dunedin, Sir James Mills touched guardedly on the subject under consideration. He said:— "No doubt most of you havo read the reports which havS appeared from time to timo in tho newspapers in connection with this particular development of the company's activities. It has been stated that the company has ulterior designs on through trades via Panama when tho canal is opened for traffic; and also that negotiations have been 111 progress for amalgamation between this company and ono or more of tho powerful companies in tho Old Country. All this publio riotioo is no doubt very flattering to us, but I take this opportunity of saying that there lias never been at any timo any foundation for such reports. I may say that we had no far-reaching object in view in purchasing these steamers (the four new deep-sea cargo steamers recently purchased by tho oompany); it was simply that tho opportunity was offered us to secure them, and we availed ourselves of it. It was believed that tho steamers would not be unprofitable, while, at the same time, it seemed to be advisable to obtain in this way an interest —although a modest one —in the oversea trades, in view of the fact that at no distant date some of the lines engaged in these trades may possibly adopt the route via Panama,' and so bo brought into contact with us through our Pacific services." WHAT IS AN "UNDERSTANDING"? Frequent uso has been made of the wbrd "understanding"- throughout the present article. When the HuddartParker Proprietary entered the Now Zealand trade there was fierce. compeI tition for a time, and then camo the inevitable "understanding"; fares and freight-rates resumed their normal proportions, the tickets of the companies became (and still remain) interchangeable, and sailing dates to suit both parties were arranged. That was not a "combine," but an amalgamation of interests—an ''understanding" which is very useful in checking tho shattering effects of competition. PANAMA PROBLEMS. Already we have oargo steamers coming direct to us from Montreal and New York. The saving in time for those vessels by cutting through Central America must make tho diversion of considerable economic value. The distances to bo travelled between New York and Wellington by tho different routes are as follow: — Miles. ' Via- Cape Town ; 13,710 Via Cape Horn 11,413 Via Suez 14,230 Via Panama 8,533 At present tlie vessels coming to New Zealand from New York follow tho Cape of Good Hope track (2297 miles longer than that via tho .Horn, which route is avoided on'aocount of the adverse winds and tides), but with 2880 miles cut off by the Canal, these vessels may adopt tho Pacific route. It dies not bltogetlier follow that they will, how-

Rumours of a. big movement in the nature of an "understanding" between certain great Shipping interests have recently been cabled from London 1 . Tho "Pall Mall Gazette," usually a wellinformed. paper, has stated that the price of shares in the New Zealand Shipping Company has risen to £20, and that the market expects an. important shipping deal to be announced shortly, with a fresh issue of capital and the j giving of a -shareholders' bonus. A' cable ' message from Lond'on coming only a'day late<r mentions "tho rumoured understanding between the Now Zealand Shipping Company, tho Royal Mail Steam Packet-Company, and a third line," and the "Financial Times" refers to an arrangement as to sailing dates, a basis of interchangeable tickets, and!- other concessions, "thus facilitating the profitable working of the fleets." The Royal Mail Steam Packet Company is a very powerful concern in the-Atlantic. It lias a fine fleet of steamers trading firom England (with Southampton as the port of departure) _to the West Indies and 1 up to New York; services Brazil and the River Plate via Franco, Portugal, and Spain; another to those places and on via the Straits of Magellan, to the west coast ports of South -America; another from London to Morocco, Madeira, audi the Canary Islands;; and still another (or rather several) out of Panama to all the Columbian, Ecuadorial, and South American ports. Besides these the .Company has coastal services in the West Indies serving Jamaica, Tnnidad, Tobago, Grenada, St'. Lucia, and Dominica. With so many interests, each dovetailing with tho other, the company holds a very strong position indeed in the shipping world. How would it benefit by an understanding with the New Zealand Shipping Company? The

have in view in connection with the opening of the Panama Canal in 1915 (or later), the new route to England does r.ot appear to offer many advantages to the company as its fleet is at present constituted. Taking tho figures of ' Mercator's Projection, the disparity in distance between tho present route via Capo Horn and that via the Panama Canal, tho difference is comparatively trifling, hardly, as a sole consideration, to bo taken into account. That authority gives the distance to bo travelled between Wellington and Ilddy- | stone Lighthouse (in the English Channel), via Cape Horn, as 11,674 miles, and that between the same two points, via Panama, as 11 ? 181 miles, a difference of only 493 miles. Even that distanco would not bear its face value in actual running, as the delays that would be caused in negotiating the Canal (with its . several locks) would mean" at tho very least twenty-four'hours more than .the call at Monte Video, at present made on tho Homeward voyage of these vessels. Allowing a steaming distance of, say, 300 miles for that twenty-four hours, the difference in' the total steaming distance between the two points'would bo reduced to 193 miles—a bagatelle. In addition to that, the Canal charges, practically fixed at 1.20 dollars per net ton for mercantile vessels carrying cargo and passengers, must be taken into consideration. That would mean that if a vessel, say, of 7000 tons (the Rcmucra is ovor that) not register were to 'use tho Canal, lier charge would bo approximately £1800, an amount which takes some making up. It may bo that those in authority may see'more passenger business to be picked up at West Indian ports on the way Homo (particularly in our winter months, which constitute the "off" season as far as passenger traffic by tho direct

eyes of all controllers of sea-borne oommorco arc at present to tno Panama Canal 1 , and to tho possibility of arriving at some workable understanding as to how their interests are to bo affected by the wedding of tho two greatest oceans. BIG FIELD FOR SPECULATION. Ono only has to tako a glance at the map of the world to faintly realise what •tho severing of tho American continent by a navigable waterway must mean to tho mercantile marine. What it will mean to New Zealand and Australia can only bo measured by deduction, and already numerous authorities havo been at work. The London "Observer" of a recent dato has no doubt that tho rumours of expected developments are based on tho consummation of tho Panama Canal. It says (June 29,1913):— "During vhe week rumours of an important shipping development were current in the trade circles and aroused much interest. The truth scorns to be that the New Zealand trade is likely to seo an imporant new arrangement. No doubt, this is duo to the coming opening of tho Panama Canal, and the great alterations this will make in the trade of tho Antipodes. The Union Company of New Zealand is thought likely to extend-, its operations, raising now capital—some say also distributing a portion of its rosorvo, hut this remains to bo seen— and coming to somo arrangement with another great Antipodal concern t picsumabily tho New Zealand Shipping Company. .. •„ "This, again, seems likely to result in further arrangements, in which tho 1\ and 0. will bo concorncd, and equally certainly the Koyal Mail could not be loft out. So that, in tho course of tho coming months, if our views provo correct, wo shall seo some very interesting and important developments ill the shiptrade. It is certain, of course, that tho opening of the Panama Canal will greatly alter tho courso of trade, and wo aro glad to find that companies flying tho British flag aro wide awako.' ARGUMENTS PRO AND CON. Without pretending to any insido knowledge a-s to what tho directors of the New Zealand Shipping Oompany

route is concerned) than is to be got at Monto Video, but that is a Temoto. contingency, as thoße islands are very well served at present. One then looks for any possible advantages that may exist for the company to use tho Canal route in placo of that via Cape Horn. Tho Panama Canal route will bo a finewoathcr route, as compared with the rigorous cold and stormy weather so frequently met with in negotiating Capo Horn—an advantage of weight to both passengers (who increasingly study their creature comfort when about to embark on a long voyage) and tho ship. If an ' understanding has been arrived at between' tho New Zealand Shipping Company • andthe Royal Mail Steam Packet Company, as rumoured, it would seem to indicate that tho local company had considered the chances and had tentatively decided that the new route would enter its itinerary—perhaps for its first-class passengor ships only. It is significant that at present the New Zealand Shipping Company has under construction at Donny Brothers' yards on the Clyde, a steamer which is to havo accommodation for 1200 third-class passengershalf as many again as any ship at present engaged in the dircct trade. Tho annual meeting of tho company to bo held next month may elucidato the position. THE THIRD LIN©—UNION S.S. CO. The "Observer" mentions tho intention of tho Union Steam Ship Company to oxtond its field of operations, and a recent cablegram from London in mentioning the alleged "understanding" hetween tho New Zealand Shipping Company and the Royal Mail- Steam Packet Company, mentions a "third lino." Most peoplo, in viow of recent financial developments, will havo little difficulty in interpreting this to mean tho Union Steam Ship Company of New Zealand. With its enormously-increased capital this successful company is not likely to allow an important epoch in tho trade of tho Pacific to pass without seizing the opportunity to "get in early" in the extension of its spheres of influence. Sir James Mills, tho discreet uwuthpicoe of tho (am-

ever, as such steamers usually bring part cargo for Melbourne and Sj'dney, which does not mako the advantage on tho score of distance bo great as it scoms at first sight. Whilst on the subject of distances, it will help to a clearer understanding of tho position if the route lengths between Plymouth and Wellington aro clearly sot out. They aro as follow:— Miles. Via Cape Town 12,910 Via Capo Horn 11,728 Via Suez 12,110 Via Panama 11,092 These figures are taken from "Tracks for Full-powered Vessels, with tlio Shortest Navigable Distances in-Nau-tical Miles," published by the United States Hydrographic Office in 1900, and from the' Admiralty chart of 1888. LONDON "TIMES" ON PANAMA. A few months ago a special articlo on "The Panama Canal," and what its completion portended, was published in tho London "Times," in tho courso of which it was stated:— "It is obvious that if tho Pacific Coast is brought nearer to Grea; Britain, Great Britain is brought nearer, to tho Pacific Coast—that is to a huge and comparatively undovoloped market. But success in trado is largely a matter of competition, and tho now routo lull benefit tlie British merchant less than it will benefit his shrewd rival in New York. Tho former will obtain no advantage in his dealings .with India, China, Japan, or Australia, for tho Suez Canal will remain as it is r.ow —tho shortest routo to tliose countries. On tho other hand, Now York, which used to bo further than Livorpool from Yokohama, Sydney, Melbourne, and New Zealand, now bccomes nearer than tlio English port to these great trading centres. Tho significance ot tho coming change will bo appreciated when it is realised that Australia and New Zealand, which are now moro than 1000 miles nearer to Liverpool than to tho eastern seaboard of tlio United States, will in a short timo be brought nearor to New York than to Liverpool by about 2500 miles. But tho Panama route is not so rcrcatly handicapped in tho mattor of'distance tihafc it may act compete

This map shows tie change that the opening of the Panama Canal will nfake .^rTquidistant A'f"A»"yo r & est route, but will not benefit the English merchant ni anj waj, as tlio pivmnn+h will be 1725 miles further off than by Suez. Vancouver Suez. Yokohama will be brought 2954 miles nearer to *ew York, while Plymouth bo W2o giy6n in t])o map :i"o b °coSa m tr from calculations by the Admiralty and the United States Hydrographic Offico of the steaming distances for full-powered vessels between the ports named.

with some of tlio traffic from Australia and the Far East which now roaches Europo by way of Suez. Success would 1)0 a matter of low trolls and cheap coal —inducements which wouid br ng vessels across tho Pacific to pick up cargo 011 tho West Co list of America. J.'or instance, coal might bo brought irom New South Wales to Chilean ports, there to bo replaced by nitrates. THE LINE MOST AFFECTED. "Of ail tho British steamship linos," continued tho "limes;," "the Mail Steam Packet Company will be most sll'ected by tho opening of, tho Panama Canal, for it una its allies, tho Pacific Steam Navigation Company and the Lamport and Holt Company, have vast interests in South America, lho vessels of tho Pacific Steam Navigation Company, for example, now proceed from Liverpool to Brazil and Uruguay, and then by tho Horn to Chilo end leru. Possibly they will return to England in the future by way of the isthmus. _ And wo may also find tho Bbips of the Royal Mail Co. on tho western side of the American continent. Then tliero are steamers —those of the New Zealand Shipping Co., for instance —which proceed from England to New Zealand by way of tho Capo of Good Hope, and return round Capo Horn. To these the , passago through tho Canal would mean a very great saving indeed in tho round trip, but it is clear also that it would mean a large expenditure on .tolls. In fact, Great Britain has a ' ar S° stake in the Panama trade. Of the ten lines of ships on the Atlantic side ot the isthmus, five fly the British nag, and there are two British lines engaged in the regular trade on the Pacific coast. Great changes will surely bo mado in the itineraries of many ot these vessels, but it is not possible yet to lay down the system on which they will proceed." PANAMA. TOLLS. In November last the tolls for the vessels using tho Panama Canal were fixed by a proclamation issued by President Taft (based on the report of Professor Emory Johnson, of tho Pennsylvania The proclamation provided as follows: — (1) On merchant vessels carrying passengers or cargo, 1.20 dollars per not vessels ton —each 100 oubio feet—of actual earning capacity. (2) On vessels in ballast without passengers or cargo, 40 per cont. less than the rato of tolls for vessels with passengers or cargo. _ (3) On naval vessbls, other than transports; colliers, hospital ships, and supply ships, 50 cents per displacement ton. (4) On army and navy transports, colliers, hospital ships, and supply ships, 1.20 dollars per net ton, tho vessels to bo measured by the_ same rules as. are employed in determining the not tonnage of merchant vessels.American coastwiso shipping was exempt from tolls, a provision which raised a diplomatic protest from the British Government, which has been raised again since President Wilson took office. The rate (1.20 dollars) was based on what the Suez rate was to be this year. Professor Johnson, in the

commerce of Europe with Chili and with New Zealand, tlio saving resulting from tho shortening of tho timo of voyage via Panama, as compared with the Sbrait of Magellan-, would not warrant tho payment of tolls of 1.20 dollara per net vessel ton. for using the Panama Canal; but tho fuel expenses via Panama will be so much less than via Magellan as to make tho canal route preferable, even with tolls of 1.20 dollars pea' net ton. Moreover, the profitable trade route between Europe and Chili is via Panama, aiid the ports intermediate -between the Isthmus and Valparaiso. Panama is tho natural entrance and exit for tho west coast South American trade." '

course of bis report on tho tolls question, said: — ! ' "A toll of 1 dollar 20 cents a neti ton on loaded merchant vessels and a reduction .of 40 per cent, from the ard rate in the caso of vessels in ballast will place the Panama Canal and its rival, the Suez Canal, upon an equal competitive footing. The Panama Canal' must compete with tho Suez route for the commerce of the Eastern seaboard' of the United States and of the Atlan-tic-North Sea ports of Europe with tho Orient east of Singapore, l'or voyages between the Eastern porta of tho United States and the Orient, fuel expenses via •Panama will be less- thani by way of Suez, and', with equal tolls at each oanal,'tlio Panama route will readily secure the traffio. "It is not to bo expccted that much of tho commeroo of Europe with t'ho Pacific seaboard of Asia can be diverted to Panama from its present route via. Suez. Distances are loss via Suez, and, with the exception of voyages' from North Euiopo to Japan and return tho fuel expenses are louver by way of Suez. Wjth equal tolls' at Panama and 1 Suez, Romo vessels will take tho Panama "route between Japan and, Europe in order to dischargo and securo cargo at American ports. To attract from tho Suez to tho American route any considerable additional sliaro of the European-Oriental tonnage, the rates of toll at Panama would liavo to bo made so low as to rcduco unjustifiably the revenues of tho canal. "A Panama toll of 1-20 dollars per not ton will not unduly burden tho commerce sorved by tho canal. The costs of transportation between tho two seaboards of tho United States will be reduced Bevoral times the amount of the toll, and for thw commerco of ■ tho Eastern seaboard of the United States with Western South Amcirioa and with Australia tho economios effected by tho Panama Canal will largely oxceod the tell suggested. Likewise the saving m timo anu fuel expenses via Panama, ns compared with the Magellan route, between our Eastern seaboard and Now Zealand will bo such as to insure tho profitablo use of tho Panama Canal. "Nor will a toll of_ 1.20 dollars i»r net ton seriously restrict the use of the oausl by European oouatrioa, Fox tho