dockyard such as Singapore has become painfully apparent since the outbreak of war.
The whole strength of the German political and economic position in Singapore before the war lay in their advantageous shipping facilities with Europe, and the control of the more important local shipping services which acted as feeders to the main European line of the Norddeutscher Lloyd. In the early days of the great bid for Eastern trade, it will be remembered that the N.D.L. and other German lines entered upon most strenuous freight wars with their British and other rivals, which were fought out to such a pitch that they eventually forced their way into both the outward and homeward freight Conferences between Europe and the Far East. Having achieved their purpose in this respect, it was comparatively easy to develop their share of the trade. Well-equipped steamers were placed on the run, the greatest attention was paid to the details of the service, particularly in regard to passenger accommodation, and they received considerable support from the travelling British public, and also from British shippers. Under ordinary circumstances, the entry of the German lines into the Conference would have been an advantage both to British steamship owners and also to merchants, inasmuch as it would have maintained reasonable and lucrative rates of freight for the former, and would have insured to the latter a stable rate and equal treatment with their competitors of all nationalities. It is now understood, however, that under the German system of encouraging export trade the shipping lines co-operated with the Imperial State railways in Germany, and granted special rates, which were appreciably lower than those of their com- petitors for the same length of haulage. In addition to this, an elaborate system of secret rebates was granted by the German shipping companies to their agents, who, in turn, granted favourable rates to their clients among the local merchants. The advantages thus secured by a firm like Behn, Meyer & Co., the agents for the leading German lines, and also the largest individual German merchants and shippers in the colony, will be readily appreciated. These advantages were consolidated by their control of the local feeding lines in the archipelago.
In the early days, it was decided by the British shipping companies that, inasmuch as Bangkok lay off the main route to China and Japan, the Siamese trade should be attracted to Singapore. Messrs. Alfred Holt & Co., of the "Blue Funnel line, accordingly formed a nominally separate company to operate a regular subsidiary service between the two ports in order to feed their through steamers.
This service
was run for years until a most advantageous offer was made to the British owners by Messrs. Behn, Meyer & Co., acting at the instigation of Herr Weigand, the former president of the N.D.L., and the whole fleet was sold outright to the Germans, the British Company binding itself not to compete for a term of years, which period has now lapsed. Having secured control of this valuable line (in 1913 the imports from Siam Proper and ports on the east coast of the Peninsula to Singapore amounted to over 4,000,000l., and the exports from Singapore to 1,100,0001.), a portion of the fleet was diverted to British North Borneo, and before the outbreak of war the mail service between Singapore and British North Borneo, two important links in the chain of British Possessions in the East, was conducted by German steamers.
This control of local shipping was used by the German houses to further their policy of decentralisation, and to stimulate a direct business both outwards and homewards with the smaller stations among the islands, where British mercantile activity was not active, as the British firms concentrated in Singapore and left the collection and distribution of goods in the subsidiary markets to the Chinese and Malay traders. As an instance of this policy, Macassar, the capital of Celebes, was made a port of call of the German-Australian line of steamers, and a considerable amount of produce was shipped direct from that port to Europe. Whether this policy of decentralisation would, in the long run, have proved successful is a matter for grave doubt, as it seriously menaced the hold of the native dealers on the trade. It, however, served to secure cargoes for German steamers, and increased the shipping commissions of their agents.
Since the outbreak of war. an effort has been made by Messrs. Alfred Holt & Co. to regain their position in the Archipelago. Three new steamers have been laid down at the Taikoo Dockyard in Hong Kong, specially constructed for the Singapore- Bangkok service, and an arangement has been entered into with the Straits Steamship Company, whose capital has been considerably increased, and it is intended that this company shall largely extend its field of operations in the future, and shall act as the feeder to the British lines calling at Singapore.
9
The general question of international shipping Conferences so far as they apply to the Far East will be dealt with at a later stage in this report. It is advisable at this point to state that--
The British merchants in the Straits Settlements consider that it will be gravely detrimental to the interests of British trade if the German lines are allowed to re-enter the Eastern Shipping Conference after the war.
American Competition.-Prior to the outbreak of war the United States was not a keen competitor in the import trade of the Colony owing to the high prices and long deliveries asked for her goods, and also owing to the fact that she was not represented on the spot by American merchant houses. During the past two years, however, the cessation of continental supplies and the uncertainty and delay in the execution of orders placed in the United Kingdom have resulted in a very large proportion of the orders for iron and steel of all kinds, bolts and nuts, galvanised and corrugated sheets, nails, copper, and brass being secured by United States manufacturers.
The United States is carrying on an active advertising campaign, and has supplied comprehensive catalogues of her manufactures to the various Consuls with a view to extending the trade. It is not considered by the local British houses that this competition will survive the resumption of normal conditions, unless the American facilities for distribution, shipping, and finance are very much improved.
The strong feature of the American trade is the large amount of Straits produce consumed in the States. New York is at the present time a more important market than London for Straits rubber and tin, but the bulk of this business is conducted through the established British houses in the Settlements.
Japanese Competition Japan is likely to become an increasingly severe competitor in the Straits Settlements. Between the years 1902-1912 her exports to the Straits remained almost stationary, but her imports of Malayan produce increased threefold Since the war, however, her trade has expanded rapidly, and Japanese merchants are rapidly extending, throughout the Settlements and also the F.M.S., lines of trade which formerly were to a great extent in the hands of our enemies. The principal articles include matches, enamelled ware, glass and porcelain ware, cotton goods-especially singlets and towels, toys, chemicals, beer, and cement. Japanese packing cases, latex cups, and coagulating trays for use on the rubber estates are appearing in considerable quantities, and a large trade is being developed in insulators, lamp-shades, and other electrical necessities. In order to facilitate the finance of this trade a branch of the Bank of Taiwan has been opened in Singapore since the outbreak of the war.
Japan's strength at present lies mainly in coal and shipping. Japanese coal- whether mined in Japan or in Manchuria enjoys a virtual monopoly in the Straits Settlements. A certain amount of Chinese coal from the Kailan Company's mines in North China is on the market, but the Japanese fuel is the bunker coal par excellence of the Far East.
Coal is mined in Sumatra and Labuan, but only in small quantities, and the price cannot compete with the Japanese. This cutward trade in coal is a valuable asset to the Japanese steamship services, and has been a prominent factor in stimulating Japanese shipping in the archipelago. The total Japanese tonnage entered and cleared in Straits ports in 1913 amounted to 2,600,000 tons, and in 1915 this figure had increased to 3,800,000 tons.
Japanese competition, so far, has not seriously affected British commercial interests, inasmuch as the articles handled have been, in the main, low-priced sundry goods formerly supplied by enemy countries. The increase in the imports of hosiery are noteworthy, and with the efflux of time and the extension of the Japanese mille we may expect to see competition in the staple cotton fabrics. Japanese shipping is likely to prove a very serious competitor in the local services, and British merchants view with some concern the almost complete dependence upon Japan for bunker coal. It is suggested that an effort might be made to develop the import of Indian coal. The question is mainly one of shipping facilities.
Banking and Credit Facilities. The banking and credit facilities in the Colony appear to be adequate to the needs of the trade. Branches of the Chartered Bank of India, Australia and China, the Hong Kong and Shanghai Banking Corporation, and the Mercantile Bank of India are established both in the Settleruents and in the F.M.S., and a liberal policy is pursued. The leading European merchants operate on their own funds, and, in addition, almost always receive a clean overdraft for a considerable amount.
A 2687
B
601