The Dominion. MONDAY, NOVEMBER 8, 1920. STATE SHIPPING ENTERPRISE

Dominion, Volume 14, Issue 37, 8 November 1920, Page 2

The Dominion. MONDAY, NOVEMBER 8, 1920. STATE SHIPPING ENTERPRISE

It is rather early yet to form definite conclusions about ' the prospects of the State-owned shipping services that have been established in Canada and Australia, but. at tins stage they seem likely to servo an important purpose,' both in fostering the development of interImperial trade and in giving pri-vately-owned shipping companies an additional reason for adjusting freights on an equitable basis. Some reservations are necessary on account of the abnormal conditions in which the shipping industry is at present, being conducted, but alike in Canada and in Australia the Government shipping services have developed rapidly on such a scale that they rank as a factor of considerable importance in the total shipping situation, In one of to-day's cablegrams the manager of the Canadian Government Merchant Marine is credited with the statement that the fleet now consists of 77 ships. A large proportion of these vessels have been completed and put into commission during the present calendar year. At the beginning of the year the Canadian Government had 26 cargo steamers in service and thirty-four under construction. The fleet is being expanded under a methodical plan with a view to fostering Canadian export trade, and thus far regular services have been established from Canada to the United Kingdom, Australia, New Zealand, the West Indies, and South America. No detailed particulars of the financial results of the enterprise are yet available, but it is stated that some of the services aro already showing"' excellent returns. It is emphasised that the Government ships are keeping Canadian exporters in ready and constant touch With markets to which they would' have no assured access if they had to rely upon private shipping companies. Dealing with this aspect of the matter, Mr. T. B. Macaulay (president of the Canada and West 1 Indian League) observes in the

course of an article in the Export Journal of Canada: —

t seo no reason why Governmentowned ships should not yield a handsome revenue from their operation, but their clnef value will be that they will givo our people access to now distant markets, particularly in tho tropic 6, and will thus givo omployment to our people, mnke the country mora prosperous and lessen the deficiencies on the Government railroads. These steamships lines . . . would compoto but little witlrour privntely-owned lines, for they would bo developing trade in parts not now served at all.

It cannot be hoped, Mn. Macauxay remarks, that Government operation of steamships will be as efficient or economical as private operation, but he considers that the Government ships will servo a useful and profits able purpose in the conditions he has outlined. It is reasonable to assume, however, that in addition the operation of the Government ships will afford a standard by which to gauge the' rates charged and services provided by private shipowners.

As much is .to be said of the Australian Government's 'enterprise, which up to tho present has shown excellent results. The Commonwealth fleet at a recent date consisted of forty-five cargo' steamers and three sailing vessels, while contracts had been let for the construction of another 27 steamers, some of which were under construction. . In its first year of operation., the Commonwealth fleet showed a net profit of £1,000,000, and it is claimed also that it has lowered or kept down freights on some classes of cargo. Questions have arisen recently, however, in regard to tho wisdom of proceeding with the building programme while costs of construction are at their present high level. It has been stated, for instance, that steamers are being built in Australia at a cost of £30 a ton, whereas practically new steamers can be bought for £20 a ton. The prospects of the. Commonwealth shipping venture may be adversely affected by tho peculiar conditions in which tho price of second-hand steamers is falling, while the cost of new construction is rising. Several 15,000-ton steamers are being built for the Commonwealth in British yards, and according to available information the agreement with the shipbuilders is that these ships are to be dclivered'at actual cost, plus a fixed percentage to cover overhead charges and profits. In such conditions the price of tho ships is liable to touch a high figure, and the Federal Government may presently find itself faced by' a.much more difficult problem than that of operating cargo steamers which were bought at a lower prico than such' ships would command today. Although the scale on which these Government services have already developed is noteworthy, they cannot yet bo regarded as affording any full.or comprehensive test of the possibilities of State intervention in the i shipping industry. These possibilities, however, evidently must be rated as important in spite of the •fact that there are difficulties still to bo faced and overcome. The extent to which State shipping enterprise is destined to develop will no doubt depend largely upon the policy pursued by private shipping companies. If the latter are content to earn moderate profits in maintaining cargo and other services under satisfactory conditions the scope of State shipping enterprise is likely to remain definitely limited. On the other hand, what has already been accomplished in Canada and Australia, together with the possibilities of interImperial co-operation on similar lines, offers a definite warning to private shipping companies that they would, be unwise either to neglect the provision of adequate facilities for trade or to lay themselves open to a charge of extortion. - The enterprise of the Canadian and Austrajiah Governments may serve its most important purpose in 'inclining shipowners to the policy of enterprise coupled with moderation which in any case is enjoined by the abnormal conditions now governing their industry. The present cost of operating ships is. enormously greater than it was before the war, but while the present volume of the world's steam tonnage is greater by more than eight million tons than it was in 1914 the total volume of freight offering from all sources is and will be for a considerable time to come much below the pre-war level. In such conditions shipowners can ill-afford to invite an indefinite extension of State shipping' enterprise.