THE SHIPPING FUSION

Dominion, Volume 10, Issue 3119, 25 June 1917, Page 6

THE SHIPPING FUSION

A CHANCE FOR THE STATE VIEWS OF THE HON. G. W. RUSSELL REPLY TO SIR JAMES MILLS ! ■ "I have carefully perused the statements madf! by Sir .lames Mills and tho .president of the Bank of New Zealand regarding the shipping fusion," said the Hon. G. \V. Ji'ussell (Minister of .Marine) during the course of an interview on Saturday with a Dominion reporter, "and see no reason to change'my opinion that it will be a disaster to this country if fhe control of our shipping -passes from us. Sir James Mills states the shipping services will probably be increased "as , the result, and that no change in the management will take place. Ho does ■ not—for lie cannot—give any guarantee that our freights mid fsh'cs will not be increased, and the people of the Dominion—producers, merchants, and consumers—thus compelled' to pay toll to :i leviathan trust in lomloii. What has been the experience of the Umpire during the war? I. understand tile P. and 0. dividends have risen from 5 per cent, before the war to 18 per cent. Does this read like patriotism? Let that fact stand as the foundation of ray argument that trusts and combinations are out for dividends at a time when the Empire is engaged in a life-and-death struggle. Would their methods be less financial after tlie war? That remains to be seen, if the fusion takes place. "The president of the Bank of New Zealand states: 'The fusion, however, w only in accordance with- the trend l ot -British-owned shipping, which is uniting its strength with the object, no doubt, of successfully competing after the war with the German-owned steamship lines so liberally subsidised by the German Government.' "This is a statement of another phase which is also hinted at by Sir James Mills. In reply, I ask, . where are the fleets of German ships now? Is it suggested that after our enemies' action in sinking our mercantile marine either we, or America, will at the close of the war hand back to Germany her interned ships? True, if Germany is still allowed to be a naval and shipping power after the war, she may in time become a-serious competitor in the carrying, trade but that cannot be for years. 3So, the German bogey is not, in my opinion, the real reason. "The combinations being set up are to lessen competition, in a word, to secure that tho shipping control shall be in few hands, and tho economic laws that govern the position will obtain, namely, (1) demand, (2) Biipply, (.!). competition, (i), and most important, the lack of it. ~" "May 1, with due respect, ask Mr. Beauchamp if, on the same grounds as he favours the shipping fusion, Up would favour the fusion of the Bank of i\ew Zealand, over which lie so ably presides, with any one of the big British banlling corporations? What would he sav if our frozen meat companies were asked to link up with the London Meat Trust or (worse etill) the Swilt or Armour meat trusts of America? May wo not fiud Germany, affer the war, fitting , us from (eay) Argentina? "The 'Christehnreli 'Press-an ultracapitalistic journal—naively says in yesterday's issue: 'We see no reason to doubt the assurances given both in regard to the New Zealand Shipping Co. and the Union Steam Ship Co. The local management will be maintained, and local interests frill continue to be looked after. If this promise is not kept we feel sure that a movement will soon' be set on foot to promote a healthy local competition, and that such a movement would receive enthusiastic support.' Tho remedy proposed is to lock the stable door after tho stsed has been stolen. But where is the money to come from 'to promote a healthy local-competition'? Is tho Gvernnient" to find it? The farmers of New Zealand already realise that they, aTe being bled by the shipping interests, and a movement is on foot to raise five millions in order to establish their own line of ships. That is what our producers think of the present situation. Need I say more? "I realise that the Union Company does not carry our produce to the Mother Country,"lrat with all its offices, plant, and equipment established, the addition of ten or twenty Stnte-owned direct boats to the fleet—and that competition may b'e necessary to steady freights—would present little increase in the total (Mist of management of the combiued services. Once let J.he control pass to the P. and 0., and the result will be that whenever the State enters the field as a. shippingcompetitor—as it surely Will, some day— we shall then have to light the P. and O. (including the Union Company). That is my point, and I emphasise it.

"At. the present moment an opportunity is offered for the State to .stop in and become the owner of a • large and valuable fleet, built up from our own trade, moil snbsidip?. and charters.. Can anyone say it would not be bettor in every way for New Zealand that we should both own and control the service, and thus be able to employ it specially for our own development after the war? The price is fixed, namely, that to be paid for the fusion with the V. and 0.. and the more T look into it the more am I satisfied the State would secure n magnificent purchase if it bought at Uie fusion price. One of the Union ship? was officially valued at between .£26 and •Jill per ton since the war opened, and ship values have considerably advauced since then. I have no other values, aitd am.therefore unable to strike an average. "I wish here to correct a statement in my previous interview. I quoted from a Dunedin writer 'that the Defence Department was paying j;100,(10l) per month to the Union'Companyfbr charters. I am assured the correct amount is in the region of JMfl.flOO. however, to tliie sum is added the money paid- for mail subsidies, coal carriage, passenjer fares of soldiers, etc., a very Targe monthly sum is involved. Perhaps the Union Company directors will tell tho public what theV have received from the State' during the last three years? \

"The precedent which lias beeu in my mind throughout has been the State's action in regard to the Bank of New Zealand. When, circumstances necessitated it, the State helped the bank—tn tho benefit of both parties. The bank has, under continuously able management, done well for the country and for the shareholders. The State lias a predominant control. It appoints the ntiijoritv o? the directors and the chief auditor. Tims the interests' of ; the penplu of New Zealand art protected, and the shareholders have benefited. Tlie balance-sheet publisiid last week is iiu eloquent tribute to the success of Hie State partnership and control. Could not the same lilies be followed in regard to the Union Company—the, present directors and managers continuing in office as representing alike the State and tlio.se shareholders who preferred not to sell their slock?

■ "I have perused flic comments of Hie Dominion .'newspapers on this important matter, unci am .satisfied, that", given a satisfactory financial scheme, the people of New Zealand are in favour of the State assuming the place of the P. ;iml 0. Company and of the Cniuu Company liecoming a' national concern. As stated by me a. day or two ago, the Government has not been inactive in tills matter. 'J'ho fusion lias not, I believe, yet (alien place. At an ';ai'l,v date the full Cabinet will meo.t. 'As Minister of Marine, I have the immediate responsibility of thi.s momentous matter, and I claim the right to nut before tho country this reply to the cablegram received by the Acting-Prime Minister from Sir James Mills in support of the fusion proposal. ____________ '