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Macassar; and this extreme distaste for outport life exhibited by the British merchant is noticeable also in Sumatra and Borneo, and stands in contrast with the increased number of British planters of late years who are managing the rubber and ten estates, to which British capital has steadily flowed since 1910.
5. One result of this German policy of opening branches in the outports of the archipelago has been the number of desirable sole or joint agencies for British manufacturers secured by then owing to their ability to distribute goods over a wide area. These agencies have been secured without any competition from local British houses, either because such bouses were non-existent, or else they were not of a standing to command confidence. I am unable to state a single instance of German manufacturers according their representation to British firms under similar circumstances.
6. There is little doubt that the German houses derived considerable advantage from illicit rebates on freight received from their shipping lines, and it is currently believed (although definite proof is difficult to obtain) that this system was also practised by the Dutch shipping companies. It is virtually impossible to secure in London direct proof of this system, but I an informed on the authority of an employé in Java, of Messrs. Orenstein & Koppel, that in one year the profits of this firm in Java amounted to 15,000. The goods were sold at little above cost, and the large profit was derived from rebates on shipping.
The Committee of British bankers and merchants in Sourabaya appointed to. advise H.M. Consul-General on questions of enemy trading report as follows:-
Although the German and Austrian steamship companies were members of the Shipping Conference before the war, it is said that they allowed a secret rebate on goods shipped to German and Austrian firms here which British firms did not receive. It is said that the German shipping companies received a Government subsidy for that purpose."
Japanese Competition.-There are indications that the Japanese are making great efforts to establish a trade in Japanese articles in Java, sometimes by unscru pulous means, such as copying trade marks, &c. This is a matter which can be remedied, as the Dutch authorities are prompt in stopping such practices. A party of Japanese manufacturers, merchants and professors has just conducted an extended tour of investigation throughout the islands, and have made a most careful study of the economic conditions. British merchants in the Netherlands Indies view with concern the probable extension of Japanese competition in textiles. So far, their influence has been scarcely felt, as the imports have been mainly in low quality fancy coloured woven goods and crapes, but attempts are being made to obtain a footing in the market in unbleached cloths, and it is realised that strenuous competition is imminent so far as grey drills, supers, low quality woven crape and striped cloths are concerned. In hosiery, underwear, and miscellaneous sundries, Japanese productions are rapidly taking the place of the German and Austrian articles, but in iron, steel, and hardware their goods are far inferior to the British or German article.
Possessing cheap and comparatively skilful labour, light freight charges on subsidised steamers, and extremely low costs of distribution, Japan appears likely to become a most formidable competitor in the market. Dutch interests will be threatened equally with British, particularly in the piece goods trade, and it has been suggested that a combination of the two interests might be formed to resist this threatened invasion.
Imports of Japanese goods into the islands increased from 57,000 in 1902 to 550,0002 in 1914, while the exports of produce to Japan rose from 660,000 to 2,200,0001. during the same period. It will be noted that there is a large balance of trade against Japan owing to the heavy shipments of rice, and every effort will be made by the Japanese to reduce this adverse balance.
The Japanese share of the shipping trade, both in respect of regular liners and chartered steamers, has increased of recent years. The Nanyo Yusen Kaisha (South Sea Mail Steamship Company) operate a regular service between Japan and Java. In 1914 this company owned three steamers with a gross tonnage of 11,318. Their earnings only amounted to little over 22,000, while their expenditure was 26,000. but thanks to a subsidy of 7,000. from the Imperial Japanese Government, they were enabled to pay a dividend of 10 per cent. and place a small sun to reserve. This instance is quoted to show how the Japanese system of shipping subsidies enables their steamers to exist on lines where they would otherwise be crushed by competition.
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American Competition.-A number of American agents have arrived in Java since the war with the object of developing a trade in U.S. productions, and there is no doubt that they are doing a larger business than before the war. The higher cost of production of American goods as compared with British, and the impracticability or unwillingness of American manufacturers to meet the requirements of the market, foster the belief that British interests will have little to fear from this competition on the return of peace conditions when home manufacturers, it is hoped, will be unhampered by shortage of labour, and when British steamships will once again be employed in the development of trade. The American manufacturers do not easily adapt themselves to outside methods, and often seek to impose their own conditions, which are not suited to Oriental markets. The imports from the United States rose from 200,0001. in 1902 to 609,000Z. in 1912, and the exports increased in value during the same period from 450,000l. to 1,150,0001.
Italian Competition. The competition of Italian textile manufacturers is fairly insistent, particularly in dyed goods of the heavier makes such as coatings, and also in dyed repps, tricots, &c. The goods are shipped from Genoa and not vid Holland. The view is expressed by local experts that the Bradford Dyers' Association would take the matter up with the same pertinacity with which they dealt with competition in black Italiane (lastings) these continental goods may be ousted from the market. Italian competition is practically confined to these heavy dyed piece goods, and the values of the total importations under the Dutch East Indies of all Italian goods rose from 100,000l. to 350,000l. in 1912.
Shipping Facilities. The shipping lines with direct Java sailings are :——
Loading at Ports in the Order
Named.
Line.
Stoomvaart Maatschappij Nederland
Rotterdam Lloyd
Stoomvaart Maatschappij Oceaan.
(Ocean S.S. Co., Alfred Holt & Co.)
Amsterdam, London and Chenoa. Rotterdam and London. Amsterdam, Glasgow and Birken-
head.
It will be noted that these three companies are all Dutch. Messrs. Alfred Holt & Co., as a matter of fact, run about five steamers under the Dutch flag and the remainder are part of the China fleet and operate under the British flag. It will be remarked that in all cases the first port of loading is a Dutch port. In pre-war days the Oceaan Co. generally placed two or three boats a week on the berth from Liverpool, provided that Amsterdam or Rotterdam could spare them, but this was never certain, and the result was that British merchants had to depend upon the space left over after Dutch and German shippers had finished loading. This entailed considerable delays and frequent "shutting out" of goods owing to the fact that space could not be reserved in Amsterdam or Rotterdam for British cargo to be loaded in London or Liverpool. The Batavia partner of one of the largest British importing firms in Java writes under date of May 26th last:-"With the exception of occasional sailings by the Holt line, the whole of the British exports are dependent on room in foreign bottoms. Not only is there the continual difficulty in obtaining space, but at the same time the Dutch merchants are regularly able to get their goods out the first and gain any existing benefits of the market. This latter fauit is to-day more apparent than ever, and British merchants have to be content with "what space is left after foreign competitors' goods have been loaded."
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*
It has been previously mentioned that the majority of the British bleached textiles are manufactured in England, sent to Holland to be bleached, and packed and shipped by the bleachers in Holland. This method has been found not only most satisfactory so far as the bleach and finish is concerned, but is also cheaper than if the goods were bleached in England and shipped direct. An expert witness before the Textiles Committee stated in this connection: "I should imagine that the saving generally is on the freight. There is an arrangement in the freight from Holland
**
to Java.
I would strongly recommend, and in this recommendation I have the support of important British interests both in the United Kingdom and in Tava, that an entirely British direct service be inaugurated, after the war, between the United Kingdom and Java and other ports in the Netherlands Indies. Steamers should load at Birkenhead (for the piece goods traffic) and London, and might call at Dutch and other continental ports if required. The essential point is that there should be regular, fast sailings,
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