"CALLING THE TUNE."

Taranaki Daily News, 15 August 1917, Page 7

"CALLING THE TUNE."

THE "NOBBLING" OP SHIPPING CAPITAL. "WAKE UP, PRODUCER!" SONE STRAIGHT TALK REGARDING "MERGERS" Sir James Wilson, chairman of the Board of Agriculture and president of the Dominion Conference of the Farmers' Union, spoke very plainly on the subject of shipping "mergers." In his annual address before the Farmers' Union Conference, he dealt exhaustively with the many matters which are now worrying the producer, but, perhaps, most importance attaches to his remarks on the shipping position. Shortly after the war began, he said, the shipping combine announced that freights would be raised in the aggregate by about a million pounds. That naturally alarmed the producer, especially as the British Government provided the war risk, both on vessels and cargo, at a low rate. "We were calmly told that we ought not to object," continued Sir James, "because we could look upon this as a contribution by the New Zealand producers as a war tax, seeing that all additional profit the shipping companies earned wan subject to a tax of 60 per cent. I thought it was a piece of gratuitous impertinence to make, the suggestion, especially seeing that despite the heavy taxation one shipping company has paid 60 per cent, in dividends, after no doubt concealing as much profit as possible, and we have it on the evidence of Mr. Bonar Law 'that he invested £BllO in fifteen shipping companies, and had received in interest £.'1084 and £3847 respectively during the last two years, besides £IOOO for a steamer which had been sunk, and in which he had £2OO invested."

FATE OP N.Z. SHIPPING COMPANY. That meant that the interest on the investment was 45 per cent, and 47 per cent., and this after paying the 00 per cent, excess profits tax. If one body of men could lay themselves out to exploint another body, the first remedy that was at hand was for the latter to find the capital and do the work themselves. That was what gave the impetus to the New Zealand Shipping Company, when it was formed. Freights were so high that a company war, formed to provide competition. Most of the shareholders lost their money when going through the slough of despond, and they fell gradually into the hands of capitalists lpokin for a good investment. Strange to say, it was the freezing process that caused the greatest loss. Steamers were built, and in the competition the New Zealand Shipping Company's shares fell very low. They were bought up at small cost, and when the mergar took place with the P. and 0. the shares were mostly held in England.

GOVERNMENT AID NECESSARY, Lord Tffthcape, at the general meeting of the P. and 0., intimated that he had not much fear of any shipping company undor the control of or run by any Government, and said Sir James, he was probably right. The. producers of New Zealand, however, could, with the assistance of the Government, fight the monopoly if they combined. The combinatioii'must he complete. Not as was usually the case, that some find the money and the rest benefit, for that would end in failure to all. Not only must the producer come in, but, if necessary, the agents must do,so too. This meant, however, that Government aid must be invoked. That was nothing unusual. Even in conservative England, when the Morgan Trust threatened to mop up the whole of the Atlantic shipping, Mr. Balfour stepped in and advanced £2,600,000 to the Cunard Line to build the Lusitania and the Mauretania. At the moment very much the same condition of things had ariseh here. The P. and O. had mopped up both our local companies just in the same way. Shares held in England enabled them to control any body of colonials, and he was told that the P. and 0. had got a bargain, and that the price should have been higher.

CONTROLLED BY ONE MAN. "Be that as it may," continued the speaker, "the whole of the New Zealand shipping is governed by one man in London. The directors and managers here have practically no say in the matter, and by a judicious spreading among agents and shippers of commissions and rebates, there is no one to make a fuss, except the producers. It is well known to everyone what their position is. Nothing short of an Act of Parliament will bring them together, and advantage is taken of them at every turn. First of all, there is a combination of all shipping companies to exclude any other company coming in. Then contracts are entered into with freezing companies, dairy associations, exporters of all kinds as to freights. Care is taken that these contracts do not run out at the same time, and this is used as a lever when new contracts arc fixed. The representatives here have been so. long at 'this game that they can play one set against another with "the art of a politician. This will go on to the end, if the producer does not wake up and take a hand. We must, however, be all producers and exporters. We are up a'gaffist a big concern, and probably a bigger concern in the Meat Tvust as well. The only way, if we want to start an opposition company, is to first nobble the freights. The only way to fight such a monopoly is to do as they do. They nobble the capital and 'call the tune' as to freights; but if all the produce of New Zealand is controlled by another company then the tune ia changed. No shipping company can get on without freights in and out. Once control that, or even a large proportion, and terms are possible."

MR. VAVASOUR'S SCHEME. Mr. Vavasour had put before the public a scheme to raise the money for such a company by way of levy. That levy had been taken up enthusiastically in Taranaki, where the dairy people had found it an easy means of raising money for extension purposes. It required some thought to work out such a scheme, and to find out how far the Government was prepared to assist it. A committee had been set up to make a full investigation on that point, but it would be premature to disclose to what stage they had reached. fTir James went on to deal with the Dominions Commission's report. The Commission asserted that it was satisfied that the operations of the steamship companies should no longer remain without some measure of Government control, and made the following recomtmendationfl:-?

(a) That contractors for the new mail services recommended above, and all other subsidised services should be required to submit for approval schedule of freight rates on the chief articles of import and export, supervision of which is important in the national interest.

(b) That bords should be set up by His Majesty's Government and the Dominion Governments for the purpose of making inquiry in cases where a prima facie ease is established that the interests of shippers are being adversely affected by the action of steamship owners or steamship conferences.

(c) That the functions of these boards should be in the main directed to investigation and conciliation, but that they should be empowered, at their discretion, to order abolition of differential freight rates,found to be inimical to Imperial trade.

A LONG, STRONG FULL TOGETHER.

Sir James quoted Mr. Massey as saying: "A valuable example of what might be done, short of actual State control of shipping—and ho did not wish tn contend at the moment that it could most successfully be carried on by the State—was afforded by the United States Inter-State Commission. This body looked very carefully into the matter of freights, and when it reported thai rfeights were exorbitant, they must he reduced. Something similar was very urgently required in the Empire. The Commission consisted of experienced shipping men, and all matters of freight could safely be referred to them. His own opinion now was, let private enterprise have its opportunity, and if it did. not give satisfaction, then let the State step in." Commenting on this, the speaker concluded his'reference to the subject:—"This of course means cooperation between the Government in Great Britain and the Government here. The people of New Zealand are, I am sure, in earnest; their present temper is such that they will not tolerate a monopoly in London taking the cream and leaving them the milk, but to remedy it will require 'a long pull, a strong pull, and a pull together.' All these important questions will receive your most careful consideration during the Conference."