BRITISH SHIPPING AND FISCAL REFORM BRITISH shipping is closely dependent on British trade, and British trade is indispensable to British shipping. Upon the prosperity of both stands or falls the wealth, the power, and the unity of the Empire, because our trade, our shipping, and the mutual welfare of the Mother Country and her Colonies necessarily progress hand in hand. Any fiscal reform affecting one of the three, for good or for evil, must therefore affect the other two; but fiscal reform is a wide term, and it is not surprising that there are certain aspects of it more especially applicable to shipping, which, if advantageous to shipping, will consequently improve British trade and strengthen the ties of the British Empire. Into these aspects of fiscal reform it is the main object of this paper to inquire. From the days of Queen Elizabeth and Lord Burghley up to the beginning of the nineteenth century the whole policy of England was directed towards establishing a world-wide trade, and, as an essential and foremost part of it, an all-sufficient mercantile marine. Both Elizabeth and Charles the First gave bounties for the building of ships over a certain size; fisheries were encouraged by bounties on the taking and curing of various fish and on some of the vessels employed, as a means of developing seafaring life; and trading companies were created, such as the Levant Company, chartered in 1581, the East India Company, chartered in 1600, and the Hudson Bay Company in 1670. The memorable Navigation Acts, passed in 1651 and 1660, restricted the importation of goods into England or any of its dependencies exclusively to English ships, of which the master and three-fourths of the crew should also be English; and exception was only made in favour of foreign ships bringing merchandise, genuinely grown or manufactured in their own countries. This policy, known in political economy as the mercantile system, of strengthening and vitalising the maritime power of the country by stimulating shipbuilding, supporting fisheries, and actively promoting trading companies, continued until after the Napoleonic wars; and it did, in fact, attain the objects which it had in view, which were the supremacy of England on the seas, and the furtherance of English commerce and manufactures. This is admitted by Adam Smith, however contrary it is to modern free-trade doctrine. The policy was not a theoretical or speculative dogmatism, but rather a practical growth engendered by the surrounding circumstances. It is remarkable that in the seventeenth century, when Holland held the control of the mercantile world, including the East Indian carrying trade, England successfully asserted itself by passing Cromwell's Navigation Act; and that now, when England has enjoyed a similar position to Holland for two hundred years, every other country is asserting itself by pursuing a similar defensive policy, very possibly with equal ultimate success if England persists in its ideal of absolute inactivity and free-trade drift. It does not follow that a reversion to the old mercantile system would be the precise remedy for the present condition of affairs-that system deliberately cramped the expansion of colonial trade for the benefit of the Mother Country-but neither are prospects of shipping so brilliant that complacent acquiescence in laisserfaire can be safely indulged in. The question then arises, Does British shipping show any symptoms to cause uneasiness? Judged by the standard of continuous increase, certainly British shipping creditably holds its own. From 1850, when the total tonnage of the British merchant navy (including both the United Kingdom and British possessions) was 4,232,000, to 1900, when it was 10,751,000, the tonnage has steadily augmented from decade to decade. In 1903 it reached 11,831,000 tons.' The figures so far are reassuring. It is only when a comparison is made between the increase of British and the increase of foreign shipping that a different story is told. Granted that foreign shipping increases in proportion more rapidly than British shipping, because it starts from a lower figure, yet the following considerations strike a note of serious warning. Examine, in the first place, the proportion of British to foreign shipping engaged in the oversea-carrying trade of the world at different periods. According to Mr. Norman Hill, the secretary of the Liverpool Steamship Owners' Association, the bulk of the shipping employed in the principal maritime countries of the world was represented by entrances and clearances amounting in 1890 to 313,000,000 tons, of which 155,000,000, or nearly 50 per cent., was British and the remainder foreign. In 1900 the bulk of the world's shipping had risen to 469,000,000 tons, of which 204,000,000, or only 43 per cent., was British. Another method of elucidating the facts is by comparing the percentages of increase in the total tonnage of the merchant navy of the British Empire, between different periods of time, with the corresponding percentages of combined foreign merchant navies.? Between 1880 and 1890 the merchant navy of the British Empire 1 Board of Trade Return, 1904, No. 294, pp. 46, 47. 2 Board of Trade Return, 1904, No. 294, pp. 46, 47; and Statistical Abstract, Cd. 2202 (1904), p. 21. increased from 8,447,000 tons to 9,688,000 tons, or 12-8 per cent. of the total British merchant tonnage in 1890; and between 1890 and 1902 (the last year for which all the comparative figures are available) the British increase was from 9,688,000 tons to 11,566,000 tons, or 16.2 per cent. Now take the corresponding figures of the combined principal foreign merchant navies. They increased between 1880 and 1890 from 8,312,000 tons to 8,497,000 tons, or 2.2 per cent. ; and between 1890 and 1902 from 8,497,000 tons to 11,136,000 tons, or 23.6 per cent. So that, even making all allowances, the foreign percentage of increase is astoundingly higher than that of Great Britain, being roughly from 2 to 23 per cent., as against the British 12 to 16 per cent. The figures for the carrying trade of the world do not by any means, therefore, convey a sense of absolute security for British shipping. It is worth noticing how largely the statistics of shipping in important ports in various parts of the globe tend to arouse the same uneasiness. To avoid being tedious, a few illustrations will suffice. In the port of Hamburg, for instance, the tonnage of British arrivals during the last decade has risen from 23 millions to rather over three millions, while in the same period tonnage arriving under the German flag has increased from 24 millions to almost five millions 3-a striking figure, even though Hamburg is a German port. If we turn to British colonies, where better things might be expected, official figures generally show the same melancholy tale. In Newfoundland the percentage of British and colonial shipping to the total shipping in 1880 was 92-3, and the foreign percentage was 7-7. In 1903 the British and colonial percentage was 64-6, and the foreign had risen to 35-4. At the Australian ports the British percentage of the tonnage of oversea ships entered and cleared was 76 in 1881, 65 in 1891, and 54 in 1902. In Hong Kong, which is an open port where customs duties are not levied, the tonnage of British ships since 1886 has increased 30 per cent., while that of Germany has increased 80 per cent., and that of Japan one hundredfold.5 In Singapore, another open port, the British increase since 1886 is 60 per cent., while Germany has doubled her tonnage, and that of Japan has increased over ninety-fold." Now turn to the shipping in our home ports. It has been noticed that German shipping in Hamburg has increased to a surprising extent, even bearing in mind that it is a German port, but the percentage of British shipping at ports of the United Kingdom has decreased between 1890 and 1903 from 72-7 to 65.5, while the foreign tonnage has increased there from 27-3 to 34-5. Some of our ports Diplomatic and Consular Reports, Hamburg. • Board of Trade Return, 1904, No. 294, p. 33. 5 Steamship Subsidies Report (1901), Appendix 20. 6 Ibid individually give very disquieting returns. Thus, in the Bute Docks, the largest docks in Cardiff, in 1897 the British percentage of tonnage entered was 81.6, as compared with the foreign 18-4; in 1902 the British had fallen to 70-7, and the foreign risen to 29-3; and similar returns may be gathered from Hartlepool, Middlesborough, Sunderland, Newport, and Swansea. 8 What, then, are the causes of this stagnation in British shipping? There appear to be several, all contributing in varying degrees. Firstly, shipowners have especially complained that some of our Board of Trade shipping regulations press unduly hard upon British ships, because they are not equally enforced upon foreign ships calling at our home ports. Reference is made among other matters to the load-line or Plimsoll regulations, and to the foreign method in some countries of measuring tonnage. If, for example, a British vessel is transferred to the French flag, its gross tonnage is at once increased and its net tonnage diminished, and as foreign harbour and light dues (except in the Suez Canal) are payable on the net tonnage, foreign ships gain an advantage. With reference to the load-line, the Board of Trade cannot compel a foreign ship to be marked with our load-line mark, and the most it can do is to detain a ship which its surveyors guess to be very improperly overweighted; but the whole question is being at present considered by a Select Committee of the House of Commons. With regard to tonnage measurement, the Board of Trade last year secured an arrangement with France and Spain that their ships should be subject to re-measurement in British ports unless they are provided with certificates of British tonnage; and this is undoubtedly a move in the right direction. Shipowners also complain of the incidence of light dues, or dues charged in respect of lighthouses, light-vessels, buoys, beacons, and fog-signals, as unjustifiably adding to their burdens, and they maintain that these should be a public charge just as much as the lighting of streets. It is defrayed by the State in nearly every other country, with the exception of Turkey, and in Great Britain shipowners pay without having any control in the management of lighthouses. Opponents of this change forget how much the safe arrival of even the necessaries of life depends upon the 'coastwise lights of England,' towards which they themselves are so unwilling to contribute. The abolition of the light dues has been recommended by several committees, and systematically opposed by several Chancellors of the Exchequer, but since the last recommendation a reduction of 12 per cent. on the dues levied has been made, which is certainly not excessive considering how largely the receipts have exceeded the expenditure." 8 Cf. Report on Foreign Ships (Application of Statutory Requirements), 1904, No. 299, p. 96. The receipts in 1897-8 were 609,9251., and the expenditure 463,7531. In 1902-3 Another matter affecting British shipping is foreign subsidies. This method of improving a mercantile marine, which is adopted by most foreign countries, has been steadily growing, and it cannot be denied that it is one of the formidable obstacles with which British shipping has to contend. The Subsidies Committee, over which I had the honour to preside, reported in 1902 'that the granting of shipping subsidies at considerable pecuniary cost by foreign governments has favoured the development of competition against British shipowners and trade upon the principal routes of ocean communication, and assisted in the transfer from British to continental ports of some branches of foreign and colonial trade.' The repeated introduction into the United States Congress, generally year after year, of a Subsidy Bill, even if it does not yet become law, shows the growing tendency towards this form of protection, and if carried would be a serious blow to British shipping. The large sums of money granted as subsidies are not only employed for the direct encouragement of improved construction and speed of ships, which may be necessary for mail service, but they also operate indirectly upon freights and trade. They operate upon freights in two ways. Either, which generally occurs in the first instance, they lower them by enabling the subsidised companies to cut out their less fortunate rivals by offering a reduced rate-a fighting rate, as it is called; or, when the subsidised companies have effectually choked off their rivals by this unfair competition, the subsidies tend to create a monopoly in favour of the companies, and so facilitate higher charges and the establishment of federations and shipping rings. No doubt fighting rates and shipping rings are to be found where subsidies are not given, but subsidies accentuate the harm these inflict. A typical instance of the evil effect of both fighting rates and shipping rings happened quite lately in reference to the comparative freights from Liverpool to South Africa, and from New York to South Africa, when the difference in rates from the United States to South African ports, as compared with those from the United Kingdom, was in many cases over 100 per cent. in favour of the American manufacturer. Provisions, candles, soap, beer, cement, bricks, deals, galvanised iron, and bar iron were all conveyed from the United States at 15s. per ton, whereas the freights from the United Kingdom varied from 20s. to as high as 31s. 3d. a ton. It was actually worth while for English manufacturers to send goods to South Africa by way of New York, paying the extra trans-Atlantic freight, in order to avail themselves of the lower rate from New York to South Africa and avoid the rates of the shipping conference or ring which controls the trade between England and South Africa. It is very distressing to record that the 25 per cent. preference in customs duties, generously given by South Africa to the receipts were 555,6971., and the expenditure 500,4311. Parl. Papers, 1904, Cd. 2192, p. 52. |