THE Wairarapa Age MORNING DAILY. TUESDAY, OCTOBER 19, 1909. COMPETITION IN SHIPPING SUBSIDIES.

Wairarapa Age, Volume XXXII, Issue 9626, 19 October 1909, Page 4

THE Wairarapa Age MORNING DAILY. TUESDAY, OCTOBER 19, 1909. COMPETITION IN SHIPPING SUBSIDIES.

Mr i'aft opens the game "of competition in shipping subsidies by a bold move, when he proposes, as cabled recently, to ask Congress to devote 7,000.000 dollars (£1,400,000), which is the amount of the profit annually derived by the Washington Government from the foreign mail services, to subsidising American steamship lines to South American ports and to the Par East. This may be regarded in the first place as a determined bid for a fair share in i I the great and growing trade with the markets of the South American republics, which in the American view should be the natural customers of Uncle yam. There are 50,000,000 people in South America, and the population is rapidly increasing, with tlw improved stability of the various Governments, and the greater security which is consequently afforded to capital and enterprise. The people of the South American States are engaged chiefly as primary producers. Thsir manufactures are negligible, and consequently they are large buyen. of foreign commodities. British and German merchants have hitherto divided the greater part of the trade between them, sending their goods in British and German ships, and taking away cargoes of meat, foodstuffs, and raw material. In 1905 the Japanese Toyo Kisen Kaisha or Oriental Steamship Company, put on a srrvice to the South American ports and with the trading representatives of thrse manufacturing countries against them, the United States manufacturers found their opportunities still further decreased. Both Germany and Japan subsidise their respective merchant vessels trading to South American porta. Hence, President Taf t's proposal is a somewhat belated attempt to gain control of a share of the trade which has lately been slipping out of American hands altogether. An annual amount of £l,400,000 is a large subsidy, and represents interest on a considerable amount of capital, but apparently only a moiety of it is to be allotted for the encouragement of shipping engaged in thp South American trade. The Japanese Government subsidises the shipping industry of Japan in

very methodical manner. In the first place, the builders are subsidised; in the second place, an allowance is made t6 every steamer of 1,000 tons or over, that has a speed of not less than 10 knots, according to the distance travelled and the speed main-

tamed. In the third place, special subsidies are granted to special lines, including the line to South American ports. German and Japan-

ese subsidised competition, to say j nothing of British unsubsidised i competition, may pussibly make it I difficult for United States liners to I pay their way in the South American trade, even if Congress should adopt Mr Taft'a proposal. Moreover, it may be confidently anticipated that both Germany and Japan would J increase their subsidies if the United States shipping should at any time look dangerous. Tn the course of his speech at Seattle, President Taft expressed the opinion that eommer cial progress would be greater in the Pacific than anywhere else during the next halt-century, and especially with China and Japan. Hence, his desire to subsidise American ships trading to those countries. At present, the Nippon Yusen Kaisha runs a monthly service to Seattle, and the Toyo Kisen Kaisha runs a ninthly service to San Francisco. Both of those lines are subsidised by the Japanese Government. It is very doubtful whether United States steamsrs, even if subsidised as liberally as President Taft has indicated, would be able to compete with them as ocean carriers. If Amercian goods are to make their way in the Far Eastern markets to the extent that President Taft anticipates, it ia certain that they will go by the lines which can afford to charge the cheapest freights. Those lines, as far as can be seen at present, are likely to be Japanese, on account of the overwhelming advantages which the Japanese shipping companies enjoy in cheap labour, cheap raw material, and cheap running expenses, apart altogether from the subsidies. No doubt when China is thoroughly awake her people will devleop new wants, and will demand foreign manufactured commodities to a far greater extent than at present. She is already demanding American machinery and railway material, besides the numerous articles that she takes from Great Britain, Germany, and Japan. But the Japanese can imitate almost every article of European or American manufacture. They understand the Chinese better than Europeans or Americans do, and they havo the great advantage of proximity to the Chinese market. Their policy in Korea and also in Manchuria shows that they have no superstitious reverence for the '•open door," and will close it with a bang it ever they get the opportunity. It appears likely that the Japanese will be able to place formidable obstacles in t!ie way of American exploitation of the trade of China in any large way. And before the "next fifty year?," to which Mr Taft has alluded, are over, it is quite on the cards that the Chinese will be manufacturing for themselves most of the articles that Japan cannot supply th?m with "Taking one consideration, with another," like Mr W. j3. Gilbert's policeman, it would appear that the lot of the American merchant and shipowner, as far as trade in the Far East is concerned, is likely to be "not a happy one," even if President Taft's proposal to grant him a substantial subsidy should become law.