CO129-445 - Public Offices - 1917 — Page 660

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I was informed by Mr. Holt (April 10th, 1916) that freight rates for British manufactures on the outward run have been kept at as moderate a figure as possible in order not to strangle our export trade, and that they bear favourable comparison with rates on other shipping routes. As an instance of the advances made, he quoted

Steel to Japan :-Before the war, 32s. 6d. ; rate at 10th April 1916, 47s. 62. Piece goods to China and Japan :--Before the war, 458.; rate at 10th April 1916, 65s.

The companies point out that there will be a considerable shortage of Allied tonnage at the conclusion of the war owing to the number of vessels sunk by the enemy, and the impossibility of replacing tonnage so lost at the present time. Furthermore, steamers have been worked hard, repairs have been reduced to a minimum, and a great amount of docking and repairing will require to be done, while those vessels which have been chartered by the Admiralty will require to be refitted, and so will not be available for coromercial work for some considerable time after the conclusion of hostilities. It is generally supposed, therefore, that the position of British companies as regards tounage will be weaker at the conclusion of the war than before.

On the other hand Japanose shipping firms will be in a relatively strong position. Japanese ships have suffered less from submarine warfare than British vessels owing to the fact that they have only one regular line passing through the dangerous zones, and that these steamers have for some time avoided the Suez Canal and the Mediterranean, and have taken the Cape route. The large profits which are being made by Japanese companies during the war are being set aside for new construction, which is being expedited as much as possible.

Suggested Action after the War.-The opinions expressed differ somewhat. Mr. R. D. Holt, M.P., whose opinion as the head of the most important line of freighters to the Far East deserves some consideration, stated that his firm did not desire a subsidy or assistance of any kind, and had no doubt whatever of their ability to maintain their position after the war. He intimated that he thought that the best policy which H.M. Government could follow would be to leave shipowners alone to fight their own battles. He suggested that if an indemnity were imposed on Germany at the end of the war, it might be exacted by taking over the German ships and selling them by auction. In any case he did not consider that German shipping competition would be serious after the war. On the other hand, the P. & O. S.N. Co., Ltd., and the British India S.N. Co., Ltd., which are amalgamated, and directed by a board common to both, make two definite suggestions. They state :-

(1) "It would seem a reasonable stipulation to be imposed upon the enemy, said to be building commercial tonnage even now, that his ships should be excluded from trading to Allied ports for a certain period after the conclu- sion of peace.

(2)

"British shipowners who have lost vessels as the result of submarine warfare, which it cannot be doubted is part of a plan to cripple the commercial interests of this country, should have delivered to them, as part of the compensation, German ships of equivalent tonnage."

(b) The Trans-Pacific Lines,

Position before the War. The principal British lines interested in the trans- Pacific trade before the war were the Canadian Pacific Railway Company, with its fast mail service between Vancouver, Japan and China; the Blue Funnel Line, operating between the Dutch East Indies, Hong Kong and Puget Sound ports; and one or two less regular lines, such as the Dodwell Line and the Bank Line. Exceedingly severe competition was experienced from the Japanese companies. The American Pacific Mail Steamship Company secured a large share of the passenger traffic between the Philippines, China, Japan and San Francisco,

The principal Japanese lines competing were the Toyo Kisen Kaisha, with its service of new, fast passenger and nail steamers between the Philippines, China, Japan and San Francisco. The Nippon Yusen Kaisha and the Osaka Shosen Kaisha maintained services of cargo steamors between Japan and Seattle.

On the whole, the trade was fairly equally apportioned between the Britial, Japanese and American companies, and conditions were quite satisfactory.

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Position during the War.-A combination of circumstances have resulted in the temporary acquirement by Japan of almost a monopoly of the trans-Pacific service.

In 1915 the U.S. Government passed the La Follette Seamen's Bill, according to the terms of which it was laid down that 75 per cent. of the crews of the vessels entering U.S. ports should speak the language of their officers. Inasmuch as the Pacific Mail Company's steamers were largely manned by Oriental crews this measure dealt a serious blow at their position. White crews were too expensive and were difficult to obtain, and so the net result of this enactment was that the principal American line on the Pacific was forced to sell its steamers and retire from the field, Two or three of the larger vessels were purchased by the Toyo Kisen Kaisha, which company at present has the virtual monopoly of the passenger service between the Philippine Islands and the Mother Country. In the autumn of 1916 the Pacific Mail Company made an attempt to revive their service in a tentative way with three small steamers, but they still find that the obstruction of the American labour unions, supported by the provisions of the Seamen's Bill, interfere with successful operation.

The Canadian Pacific Railway Co. were not able to take immediate advantage of the position, inasmuch as the large new fast Empress liners were acting as auxiliary cruisers. These vessels, however, have now been restored to their owners, and are once more being run in the service, and it is hoped that some of the more valuable American cargo may be transferred to the Vancouver route.

Since the war, the Dutch-Java-China-Pacific-Lijn have inaugurated a direct service between Java and the Philippines and the United States. As they have been able to secure full cargoes from these markets, very little attention appears to have been paid to the China trade.

The route to New York via the Panama Canal will also conpete seriously in the future with the direct trans-Pacific lines to Vancouver, Seattle and San Francisco. The greater part of this trade is at present in the hands of British shipping, but there is no doubt that the Japanese lines are paying special attention to this route.

I am informed that British interests in the Pacific are now nominally represented

by seven steamers as compared with 27 vessels employed by the Japanese.

There seems to be little doubt that Japanese mercantile shipping is destined to maintain a predominant position in the Pacific. This appears to be part of the political policy of Japan, and no efforts will be spared by the Japanese Government to consolidate and maintain the position recently acquired. Prior to the war, the Toyo Kisen Kaisha, notwithstanding a subsidy of over 266,000L, was run at a loss, and even in 1915, under favourable circumstances, their net earnings were less than the subsidy received by 86,000Z. All the shipbuilding yards in Japan are now engaged in turning out mercantile vessels, and although they have been somewhat hampered since the war in securing fine steel and other materials from Great Britain the output nevertheless has been considerable.

Suggested Action after the War.-The Manager of the Canadian Pacific Railway Co. at Yokobania makes the following suggestion, in which I entirely concur :-

"I would urge that, inmediately war conditions permit, British ship. building yards should be allowed to give preference to the laying down and completion of steamers required for the established trade routes. I have, of course, more especially in view the strengthening of the service between Vancouver and the Orient, where additional tonnage is urgently needed. As it will, however, take some time to build steamers for this purpose, I would, as a temporary measure, suggest using such captured enemy steamers as can be condemned by the Prize Court and can be utilised on the Pacific."

(c) The Coasting Trade in the Far East.

The Straits Settlements, Borneo and Siam.-The coasting trade between Singa- pore, Siam, and Borneo was before the war practically monopolised by the local steamers of the N.D.L. Since the war, however, a serious attempt has been made by the Straits Shipping Co., backed by the Blue Funnel Line, to capture this trade. Specially constructed steamers have been laid down, and there appears to be little doubt that the traffic will largely remain in British hands after the war,

The Dutch Islands. The coasting trade among the Dutch islands is virtually monopolised by the Dutch Royal Packet Co., and is likely to remain so after the British firms have little opportunity of securing this trade, and so far have refrained from making the attempt.

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