Sessional_Paper_1923 — Page 78

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The Government has not received the S.S. Patriot's audited figures, but, whatever results these show, Mr. C. R. Burkill has at least the consolation that his firm received considerably more remuneration in respect of this ship when under Government Control than it had been receiving under the charter arranged by his firm. Messrs. A. R. Burkill and Sons have not presented any claim for losses incurred by the S.S. Patriot or Wollowra

The Douglas Steamship Company's accounts show that that Company was able to pay a dividend of 12% and a bonus of 10% in respect of the year ending the 30th June, 1918, and a dividend of 12% and a bonus of 6% in respect of the following year, with due provision for depreciation, reserve, and underwriting in addition.

On the other hand there may be quoted the case of one vessel which was so crank that crews were reluctant to go to sea in her, and it was unlikely that her insurance would be renewed. New decks were required to obviate claims on account of sea water spoiling the cargo, and on every trip ballast had to be purchased, as the ship when light was liable to capsize, while the ballast had to be taken out to make room for cargo. In this case a considerable sum due to the Government was remitted ex gratia. In two other instances special circumstances led to a remission of certain payments due.

The Hongkong Government has throughout maintained the position that the majority of its controlled vessels were old and out-of-date, with excessive coal consumption and heavy repair bills, and that therefore the owners, being remunerated at the same rate as competitors operating more modern and up-to-date ships, were in this respect at a decided disadvantage; although the owners of Hongkong controlled vessels did not pay income tax or excess profits duty. The Hongkong Government cannot however agree that the owners lost money, and it suggests that, in the minds of some owners at least, there has been a confusion of thought between losses supposedly incurred and profits anticipated from war conditions which were not received.

33. In a letter addressed to the North China Daily News, under date the 21st June, 1923, Mr. Burkill wrote:-

"The most amusing feature of this is that while the Hongkong Governmutt were apparently carrying such war risk, they kept the secret so well tnat shipowners were not informed that war risk was covered, and I defy ehy Government servant in Hongkong to produce any document showing eeh the owners of the S.S. Wollowra were notified that the boat was covered for a specified sum under a Government war risk policy or any other war risk policy."

Mr. Burkill had previously said that "we received no Government policy for war risk, and insuring this risk was no small cost even though our boats were not in the danger zone."

The S.S. Wollowra was requisitioned on the 30th November, 1917, under Admiralty Charter Party T. 99, in which it was stated that the Government assumed liability for war risk.

In a circular letter, addressed under date the 13th March, 1918, to owners or agents of all the steamers, including the S.S. Wollowra, it was stated:-

"The Government will accept all war risks (vide clause 19 of Charter Party T. 99) but, where it has been your practice to incur this expense in the past, you are authorised, for the present, to continue this expenditure on Government account".

As in his letter to the North China Daily News Mr. Burkill quoted this circular letter, he had presumably read it.

On the 18th May, 1918, Messrs. Moller & Company, representing the 'ollowra's

owners, wrote :-

"re S.S. Manapouri, Castlefield, Wollowra. The parties concerned are anxious to know if in case of any of these vessels are lost through submarine or war-like cause whilst under Government requisition or Control, whether they will be fully covered by the Government for the full value of the steamer".

The Government in reply quoted from Charter Party T. 99 the Government's undertaking to accept all war risks.