THE FUTURE OF THE NEW ZEALAND STEAMSHIP COMPANY.

Te Aroha News, Volume VII, Issue 470, 10 May 1890, Page 4

THE FUTURE OF THE NEW ZEALAND STEAMSHIP COMPANY.

policy OF MR DAWES. A DIVIDEND IN SEPTEMBER. (FROM OUR SPECIAL CORRESPONDENT.) London, March 7. I have been anxious for some time past to interview Mr Dawes on the subject of his beneficent schemes for prospering the New Zealand Steamship Company. He would not, however, consent to converse about the matter either with me or with any other correspondent until a statement of his amended proposals, etc., had been despatched to the Colonial Board. This went, I understand, by the last ’Frisco mail, and a few days later the city magnate kindly intimated to me that I might call. I, of course, did so, and, mindful of the value of time to my illustrious victim, and of the admirably lucid and convincing speech he made at the big meeting in November, asked no questions, but (after explaining my mission) let Mr Dawes talk the matter out in his own way. Refreshing his memory from time to time with notes, the great man discoursed somewhat as follows : THE WORK OF A YEAR. Nearly a year has passed since I commenced to interest myself in the New Zealand Steamship Company’s affairs, and became its chief creditor in place of the defunct Sir William Pearce. The concern had been indifferently managed in my opinion, and I suggested various reforms and improvements. Since then the Company’s debt has been reduced £IOO,OOO, and we have besides spent nearly as much on refrigerating apparatus. Not a bad start, is it ? I have also meanwhile paid off the Bank of New Zealand and obtained con trol over the mortgages of all the ships and steamers, and a deed is now in preparation to enable the Company to raise £500,000 debentures at 5 per cent, interest. By the time the legal formalities are fixed up the Company’s indebtedness to me should be reduced to about £200,000, and in exchange for debentures of the same value we intend to transfer the property to trustees for the debenture-holders. Providingthis arrangement is carried out, the Company will be no longer in the hands of myself or any other creditor, and we shall have fully £200,000 available for building new vessels, that is to say, a margin of £IOO,OOO debentures, and nearly £105,000 uncalled capital.

SHARE CAPITAL. With such a marked improvement in the position of the Company, it may seem, to some people, unnecessary to reduce the share capital by £2 per share, but on this point I should like to be explicit. Our five steamers with their refrigerators are worth, assuming them to be valued at £70,000 apiece, £350,000 ; add 14 sailing vessels at £7,000 each, and our fleet totals a value of £450,000; deduct the probable indebtedness on 30th June, 1890, of £200,000, and this leaves a balance of £250,000 ; divide this by our 60,000 shares, and you will observe that it only gives a value of £4 3s 4d per share. Now, the Company cannot absolutely be considered sound, until the property has been w-orked down to this figure. In view, however, of our goodwill in a prosperous and increasing business, I consider we shall have a right to pay a dividend when the deficit has been cleared off by the now projected reduction of £2 per share on the share capital. By way of indicating how I get at the value of £70,000 for each steamer, 1 should explain that the British India Company, of which I am a director, have recently contracted for two first-class steamers for the Queensland mail service at £l9 10s per ton. The size of these boats is 5,500 tons each. They are to be built A 1 100 at Lloyds, three-deck class, will steam 14£ knots and carry 80 firstand 30second-class passengers. Both are fitted with hydraulic gear for working cargo, electric light, teak decks, small refrigerator for provisions, and first-class outfit. On this basis our five steamers would cost about £420,000, and deducting 30 per cent for five years' depreciation at 6 per cent., gives a value of £60,000, or, with refrigerators, etc., £70,000. For money-making purposes, however, the ships of the New Zealand Shipping Company are interior to those built for the British India’s Queensland trade; and, being mindful of the necessity to hold our own against all comers, it behoves us to make our position strong for all possibilities.

THE SHAW-SAVILL FLEET. Looking to the future, I feel sure that the Shaw-Savill Company will regret the possession of their very mixed fleet, viz.— five first-class mail steamers, thirty sailing ships, and three cargo steamers. Tyser and Co. and Turnbull, Martin have, remember, already no fewer than 11 cargo steamers in the trade. In my opinion the New Zealand Steamship Company and Shaw-Savill’s should be prepared, at no distant period, to run a first-class service of mail, passenger, and cargo steamers once a week, and also to gradually reduce the rates of freight according as they find this can be done to a profit. At present the rates in the New Zealand trade are higher than those charged to Queensland, though the Queensland service is a more expensive one to work. I fancy Mr Savill is fearful as to the effects of such a service upon the interests of his large fleet of sailing vessels. Undoubtedly it is a serious question, and one which affects his line much more than it doe 3 the New Zealand Steamship Company. THE DANGER OF HIGH FREIGHTS. Nothing gives me more anxiety with regard to the future of our business than the arrangements which exist for maintaining the present high rates out and home. At ; present, we are making large (I might almost say excessive) profits, but we are giving a footing in the trade to other firms whom we may one day find it almost; impossible to dislodge. I object to following the course taken by the Shaw-Savill Company in providing cargo steamers, and favour the addition of steamers of the 8.1.N.5.N. Jumna class. Of course there is more immediate, profit in running cargo ships, but with an eye to the permanency of our trade, I am convinced that it is to both our and Shaw-Savill S.S. Company’s advantage to make the service a first-class one, and by the two mail lines each adding four more large and powerful steamers, we shall be able to maintain a regular weekly service. SECOND-CLASS PASSENGERS.

Recently I have been looking into the arrangements of our own steamers to see how they can be improved, and I propose to arrange the accommodation in such a manner that we shall in future be able to carry the same number of second-class passengers much more comfortably than at present, and yet obtain additional cargo space to the extent of 300 tons per steamer. The cost of these alterations will not, we estimate it, be more than £2,500 for the five ships, whilst the increased freight for one vear at present rates would amount to £15,600. A GREAT FUTURE. It is my opinion (wound up Mr Dawes) that when the arrangements 1 mention are

completed, our Company will be the leading one in the New Zealand carrying trade, and have before it a thoroughly prosperous future. A serious danger to be guarded against is unnecessary friction with Shaw, Savill and Company. My firm conviction is that the judicious policy is for us to work in complete harmony with this concern, and not let any petty jealousies mar our mutual interests. DIVIDEND. Should the debentures be successfully carried through, it is confidently anticipated that a dividend will be declared by the New Zealand Shipping Company, not in May—as was at first hoped—but September.