SHIPPING MERGER

Dominion, Volume 10, Issue 3133, 11 July 1917, Page 6

AGREED TO BY BRITISH

TREASURY

PROTEST BY MEMBERS OF

THE HOUSE

VIEWS OF MINISTERS

The shipping merger has been considered by members of Parliament since the House assembled, and .yesterday a meeting of members was held to discuss the matter. As the outcome of that meeting about 40 members interviewed Jlr. Massey, Sir Joseph Ward, and Jlr. G. W. Russell on the subject yesterday. The speakers oil behalf of the deputation were: Messrs. D. H. Guthrie, G. 'Forbes, T. K. Sidey, and L. Ji. lsitt. They had como to ask the Government to take such steps as might be possible to prevent the merger from taking c-ffeci, if this could in any way be done, but Mr. Mussey told them at the outset that he had just received a tekgram to say that the British Treasury had approved of the proposals of tho union Company with regard to the merger with the P. and 0. Company. This announcement caused some dismay, and all the speakers expressed extreme alarm as to the possibility of this country suffering severely by coining into the clutches of a. big shipping trust. The deputation suggested that Stato competition might be necessary to keep down fares and freights. Not the Right Ships.

Mr. Jlassey said that under the charters by whicu the Government had taken over some Union Company ships for transport purposes the Government had the right to purchase, these ships. There were ten ships so chartered by the Government lroni the company. A member: At what price?

Mr. Alassey said that tliere was a dispute between tliw Government and ino Union Company as to whether the rates paid under the charters were what were known as Blue Book rates, rates iixeu on a scale recommended, by the Impel'- 1 ial Government at the outbreak cf war. This gave the Government a certain amount of control over these s.i.ips. tie could assure the deputation that the Liovcrument's first desire was lo safeguard the interests of the people of Now Zealand if it was possible to do so. His own opinion was, however, : hat these ships under charter to the Government Were not the class of ships New Zealand should purchase. Some of them were purely passenger ships and some of them were small.

Sir Joseph Ward: And very old. Mr. Massoy said that if the Government was to purchase ships it should buy largo insulated ships. Personally lie regretted for sentimental reasons that the transfer had taken, place. The Union Company had always been regarded as a New Zealand company. The correspondence be had received did not end tho matter. It was the intention of the Government to communicate again with tho Secretary of State for the Colonics. The Government had already asked the Imperial Government not to permit the transfer of shares, but apparently tho opposition had been withdrawn. Mr. Isitt: It is hopelessly too late now?

Mr. Massoy: I don't know. 1 don't knoiv whether anything more can be done or not. Wo shall not know until wo get a reply to the cablegram which we propose to send to the Secretary for the Colonies. Mr. Massoy added that lie had never lieard of tho proposed merger while he had been at Home. No Cause for Alarm.

Siv Joseph Ward said that lie thought I'arli.imcnt was entitled to Hie fullest information on anything connected 'villi the matter. Until llicy had reached Canada on their return to Nov Zealand they had never noard a word of any kind about the proposed merger. In lizard he had sreii Sir James Mills jute imtl Mr. Iloldsworth several times, _ but neither of them had mentioned it to him that any merger was under consideration. For his own part, lie would oppose the purchase of Ihe Union Company for three millions. It was not worth this amount to this country What reason had we to be afraid of the t>. and 0. or any other company? Ho had never had a share in tho Union Company or any other shipping company, hut he admitted that it was, and had been, a very fine company for New Zealand. If wc wished to tackle this question of transportation it would be possible to provide all tho steamers required for the coastal trade of this country for half a million, and if wc wished to spend a million we could get in addition better ships for the AustralianNew Zealand trade than the Union Company now had. But it would be folly to attempt to nurcha.se ships in war time. He did not fear the consequences of anything that had been done, because the strength of the country lay in its abilifr to procure at any time sufficient ships to ensure that fares and freights would not be raised unduly. But he would strenuously oppose any -idea of giving three millions for tho Union Company's fleet. He would much rather see the Government buy a line of steamers built to suit our own lequirements. If after the war t-ny shipping company or combination r.f companies tried to extort exorbitant freights from the producers of this country, the State would have to interest itself in the matter. Without trying to drive out the company, it might bo possible, by subsidising another line, perhaps, to keep down freights. Ho would have infinitely preferred to see the company maintain its independence, but he did not think this country should be down in the mouth because the Union Company had combined with tho 15,I 5 , and 0. Company. He did not think it would be possible for the Union Company to carry on the intercolonial trade by black labour. ' Rising Freights. Mr. Russell .spoke at length. Our ex-, perience with tho I'. and 0. Company to date had not been such as to justify confidence. Before the war the freight on wool was |d. per lb., being Jd. i;:ore than was paid from Australia. Early in the war the freight was raised by jju. per lb. Last year the I'. and 0. Company merged with the New Zealand Shipping Company, the wool freight was raised by Id. per lb., representing <£8(i2,()00 on the wool in New Zealand, and being an advance of 280 per cent, on pre-war rates. How far the P. and 0. Company were responsible for this he could not say, but there were the facts. Cabinet had considered the proposed merger before tho return of Mr. Massey and Sir Joseph Ward, .and had cabled to tho British Government asking that tho British Treasury shculd withold consent to tho transfer cf the Union Company's shares. The riply of tho Imperial Government to tl:is request was that there seemed to bo no real reason for the lmeprial '.lovenvnent to interfere in the matter. Ho had no doubt that on account of pressure from the P. and 0. tho Imperial Government had now allowed the deal to be pushed through.

What the State Pays the Company. He mentioned one or two facts re. gardiug the relations of the Union Company with the people of New Zealand. From the time of imposition of the property lax in 1579 until its repeal in 1891, the ships of the Union Conipany were exempted from taxation, while everyone else paid on the whole of their property. And during the five veais ending March 31, 1917, the Government had paid .£3,49:1,000 to the Union Company for services rendered. Of this sum <C2,;i93,000 had been for war services. More than the value of some of the ships chartered had been paid by the Government for the hire of them." For one ship valued at JiGD.OOO the ,snm of ■£131.000 had been paid in hire. He calculated that the price paid for the company's assets was about .£lO 10s. Bd. per ton on the tonnage of the whole fleet, and this was a very low price at which to buy ships now. His own suggestion, if he might vmture to make ono to the Govenim-mt, was that the matter should be hold over, or that a Royal Commission or a Com-

uiiltee of the House should b? ret up (o inquire into it.

Sir Joseph Ward Explains. Sir Joseph Ward said ho wished to refer to one Air two remarks by ,Mr. Russell, which might be misleading. .It was true that big sums had been paid for the hire of steamers, but it should bo understood that .this hire included payment of crews, the cost of eoal, and all depreciation charges, for till of these lvtre paid by the company. It must not be supposed that flic Government was making hugo concessions to the Union Company. He did not think the Govi-rniueut could have got the ships elsewhere in any cafe. The original charters of transports were made before he joined the .National Government, but the charters had come up for renewal after ho joined the Government, and with the knowledge of Mr. Russell and himself. Mr. Russell .said (hat nothing that ho had said was intended as criticism, but as a plain statement of facts. He had certainly not wished to criticise anything clone by his colleagues.

Mr. Massoy, in conclusion, gave the members assembled his assurance that anything the Government could do to protect the people of New Zealand against demands for exorbitant freights would be done.