THE SHIPPING MERGER.

Taranaki Daily News, 17 July 1917, Page 7

THE SHIPPING MERGER.

AGREED TO BY BRITISH TREASURY | PROTEST ®Y MF.mrctks OF THE HOUSE. VIEWS OF MINISTERS. The shipping merger has ibcen considered by members of Parliament since the House assembled, and a meeting of members was held to discuss the matter. As the outcome of that meeting about 40 members interviewed 'Mr. Massey, Sir Joseph iWard, and Mr. G. W. Russell on the subject last week. The speakers on behalf of the deputation were: Messrs. D. H. Guthrie, G. Forbes, T. K. Sidey, and L. M. Isitt. They had come to ask the Government to take such steps as might ibe possible to prevent the merger from taking effect, if this could in any way fee done, (but Mr. Massey told them at the outset that •he had just received a telegram to say that the British Treasury had approved of the proposals of the 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 se- j verely by coming into the clutches of a big shipping trust. The deputation suggested that State competition might ibe necessary to 'keep down fares and freights. NOT THE PJIGHT OTPS. Mr. Massey said that under the charters by which 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 from the company. A member: At what price?

Mr. Massey said that there was a dispute between the Government and tie Union Company as to whether tie rates paid under the charters were what were known as Blue Book rates, rates fixed on a scale recommended by the Imperial Government at the outbreak of war. This gave the Government a certain amount of control over these ships. He could 'assure the deputation that the Government's first desire ivas to safeguard the interests of the people of New Zealand if it 'was possible to do so. His own opinion was, however, that tlieso 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. Massey said that if the Government waa to purchase ships it should buy large insulated ships. (Personally he regretted for sentimental reasons that the transfer had taken place. The Union Company had always been regarded as a New Zealand company. The correspondence he had received did not end the matter. It was the intention of the Government to communicate again with the Secretary of State for the Colonies. The Government had already asked the

Imperial Government not to permit the transfer of shares, ibut apparently the opposition lia/1 been withdrawn. Mr. Isitt: It is hopelessly too late now?

Mr. Massey: I don't know. I don't know 'whether anything more can be done or not. We shall not know until we get a reply to the cablegram which •we propose to send to the Secretary for the Colonies. Mr. Massey added that he had never heard of the proposed merger while he had been at Home.

NO CAXJRE K>S ALARM. •Sir Joseph Ward said that he thought •Parliament was entitled to the fullest information on anything connected with the matter. Until they had reached Canada on their return to Zealand ; they had never heard a word of aiiy kind about the proposed merger. In England he had seen Sir James Mills once and Mr. Holdsworth several times, but neither of them had mentioned to hiin that any merger was under consideration. For hjs own part, he would oppose the purchase of the Union Company for three millions. It waa not worth this amount to this country. What reason had we to foe afraid of the P. and 0. or any other company? He had never had a share in the Union Company or any other shipping company, tat he admitted that it was, and had been, a very fine company for New Zealand. If we wished to tackle this question of transportation it would (be possible to provide all the steamers required for the coastal trade of this country for half a million, and if Ate wished to spend a million we could get in addition (better ships for the Australian-New Zealand trade than the Union Company ntfw had. But it would he folly to attempt to purchase ships in Avar time. He did not fear the consequences of anything that had been done, because the strength of the country lay in its ability to procure at any time sufficient ships to ensure that fares and freights would no't be raised unduly. But he would strenuously oppose any idea of giving three millions far the Union Company's fleet. He would much rather see the Government buy a line of steamers built to suit our own requirements. If after the war any shipping company or combination of Ciwnpanies 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 be possible, by subsidising another line, perhaps, to keep

down freiglits. He 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 the P. and 0. CompanyHe did not think it would foe possible for tho Union Company to carry oil the intercolonial trade by black la'bor.

RISING FSEIGHTS. ; Mr. Russell spoke at length. Our ex- t perience with the P. and 0. Oonjjany to data liad not been such as to justify con- < fidence. Before the war the freight on 1 wool was %d per lb, being i/,d more than • was paid from Australia. Early in the ■War the freight was raised by %d per lib. . Last year the 'P. and 0. "Company wvged with "the New Zealand Shipping Com- \ pany, the wool freight was raised by Id per lb, representing £56'2,000 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 re- , sponsible for this he could not say, 'but ' there were the facts. Cabinet had considered the proposed merger before the return of Mr. Massey and Sir Joseph Ward, and had caibled to the British Government asking that the British Treasury should withheld consent to the transfer of the Union Company's shares. Tho reply of the Imperial 'Government to this request was that there seemed to be no real reason for the Imperial Government to interfere in the matter, 'He had no doubt that on account of pressure from the P. and O. the Imperial Government had now allowed the deal to be pushed through. WHAT THE STATE PAYS HEE COMPANY. He mentioned one or two facts regarding the relations of the 'Union Company with the people of New Zealand. From the time of imposition of the property tax in I®9 until its repeal in ISM, the ships of the Union Company were exempted from taxation, while everyone else paid on the 'whole of "their property. And during the five years ending March 31, 1917, the Government had paid £3,493,000 to the Union Company for services rendered. Of this sum £2,393,000 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 £60,000 the sum of £131,000 had been paid in hire. He calculated that the .price paid for the company's assets was about £lO l«s 8d per ton on the tonnage of the whole fleet, and this was a very low price at -which to buy Bhips now. His own suggestion, if he might venture to make <me to the Government, was that the matter should be held over, or that a Royal Commission or a Committee' of the House should be set up to Inquire into it.

SIR JOSEPH WARD EXPLAINS. Sir Joseph Ward said he 'wished to refer to one or two remarks by Mr. Russell, 'which might Ibe misleading. It was true that big sums had been paid for the hire of steamers, but it should be understood that this hire included payment of trews, the cost of coal, and all depreciation charges, for all of these "were paid by the company. It must not be supposed that the Government was making huge concessions to the Union Company., He did not think the Government could have got the ships elsewhere in any case. The original charters of transports were made before he joined the National Government, but the charters had come up ifor renewal after he joined the Government, and with the knowledge of Mr. Russell and himself. Mr. Russell said that nothing that he had said was intended as criticism, but as a iplain statement of facts. He had certainly not wished to criticise anything done by his colleagues. • Mr. Massey, in conclusion, gave the members assembled his assurance that anything the Government could do to protect the people of New Zealaiid against demands for exorbitant freights would 'be done.