Sessional_Paper_1923 — Page 77

72.

In particular connection with the Hongkong Control Scheme Mr. Moller mentioned three vessels only, the S.S. Manapouri, Castlefield, and Wollowra, and he stated that "the audited figures covering the running of the steamers under control in most cases showed a severe loss." The Government has received statements of alleged losses in respect of six of the seventeen steamers controlled.

31. Mr. Moller's remarks were generally supported by Mr. C. R. Burkill, who said that he could confirm them from personal experience.

32. The Government has not accepted the audited figures, referred to by Mr. Moller, and it is its experience that expert opinion of the value of the subject matter of a claim varies very considerably according as the claim is made by or against the Government. The following figures may be quoted in this connection. The audited accounts in respect of two vessels gave $10,488 and $36,320 as actual losses sustained, exclusive of interest, over the period 16th April, 1918, to 31st January, 1919. These vessels were owned by two one-ship Companies whose balance sheets in respect of the year 1st February, 1918, to 31st January, 1919, show; in the one case profit for the year $384,045, remuneration to Directors and Auditor $38,424, and dividend of $378 per $50 share and in the other case profit for the year $214,265, remuneration to Directors and Auditor $21,446, and dividend of $190.50 per $50 share, the capital being $40,000 and the steamer being written down to $20,000 in each case.

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With regard to Mr. Moller's ships, his audited accounts, which have not been accepted by the Government, show loss sustained by owner exclusive of interest, $42,359 in respect of the Manapouri, and $19,134 in respect of the Castlefield. Mr. Moller has not made any claim for loss in respect of the Wollowra. The total of the two claims is $61,493, against which there is a debt due by Mr. Moller to the Hongkong Govern- ment in the sum of $44,512, exclusive of interest. Almost the whole of this debt is due, not in respect of Mr. Moller's ships, but in respect of a sum paid in error by the Govern- ment to Messrs. Moller (Hongkong) Ltd. on account of cargo carried in the S.S. Patriot.

As regards the Castlefield, Messrs. Moller & Co. with the approval of the Shipping Control Committee let the ship on a most advantageous charter for twelve calendar months from December, 1918. The charterer failed to take the vessel up, the Attorney General of Hongkong joined with the Castlefield Steamship Company as plaintiffs in an action against the charterer, judgment was obtained in a very large sum, and it is under- stood that the matter was finally settled on payment of between $300,000 and $400,000. The Hongkong Government made no claim in respect of the sum which would have been due to it up to the end of January, when its control terminated, but it did rely upon Mr. Moller's debt being paid out of that money. Even if Mr. Moller had discharged this debt, he would still have had a most substantial sum in hand.

The Government is unaware of the subsequent history of Mr. Moller's three ships l except that it is informed, though it cannot vouch for the fact, that the S.S. Wollowra was sold for a much larger sum than the original purchase price; but it is unable to find any evidence in support of the allegation that the winding up of Messrs. Moller & Co. (Shanghai) Limited is in any way due to the Hongkong Control Scheme.

The S.S. Patriot was owned by Messrs. A. R. Burkill & Sons, and at the time when she came under the Hongkong Control Scheme she was on time charter for a period of five years ending in 1921, at a rate of $12,000 a month. With regard to this Messrs. Burkill's agents wrote to the Shipowners' Protection Association under date the 11th April, 1918-

“S.S. Patriot. Owing to the above vessel coming under Government Contrse on or about the 15th April, 1918, according to the proposed control rato; the steamer will be earning $15,010 per month, which in this particular case is an improvement in the earning capacity of the steamer"; and on this very same date, the 11th April, Messrs. Burkill's solicitors wrote to the Colonial Secretary stating:--

"We enclose herewith working accounts of the S.S. Telemachus, Pheumpenh, Haimun, Brisbane, Wollowra, Manapouri, Castlefield, and Patriot. From a perusal of such working accounts it will be seen that, when the remuneration proposed to be paid by the Government is placed against the working expenses, the result is a very substantial monthly loss. Unless the Government are prepared to very substantially increase the remuneration bank- ruptcy or liquidation will be the inevitable outcome”.