["State-Owned Steamship Line", The West Australian, Saturday 22 June 1912, page 8]
STATE-OWNED STEAMSHIP LINE.
ITS DEVELOPMENTS AND ITS LIMITATIONS.
(By "Nauticus.")
In whatever light the embarkation of the State Government in the steamship-owning business is regarded, opinion will be united on this ground--that the experiment is an interesting one. Those who have confined their attention to the subject in its strictly limited sense – and they are apparently the bulk of the people – have no conception of the difficulties which lie ahead. It is a venerable and wise adage which commends the spirit of enthusiasm in any undertaking. It is an equally venerable and wise saw which points out the wisdom of looking and estimating distance before any attempt is made to leap over a chasm. However the venture may be regarded, it is but right and proper that it should be dispassionately examined, in order that no misconception or misunderstanding may exist as to the nature and extent of the opposition likely to be met with and the difficulties to be overcome before success is possible. An entirely new departure in State enterprise is being taken, and on that account experience has to be gained as progress is made. The State-owned line of steamers will, technically, occupy, what in ordinary commercial parlance, is known as two trade routes. These vary in importance. That which may be designated by the geographical term South-east is of comparatively slight importance; so slight, in fact, as not to be regarded as a serious disintegrating factor. The other, the North-West, is different, so much so, that comparison with the route previously indicated, is of little value, say, for purposes simply of comparison. Had the energies of the new State enterprise been confined to the South-East route, matters would have been simplified. However, they are not, so on the principle of "in for a penny, in for a pound," the State is going into another channel, with what results cannot be said; with what obstacles to contend may be set forth, at least, in part. Owing to the wide divergence of conditions existing along, or governing, the two routes over which the State steamers are to operate, but one is worth serious consideration. In each case there is limitation; and, while that limitation exists, viewed strictly from the trade standpoint, neither can hope at the end of the year to show a satisfactory balance on the credit side of the ledger. Stated otherwise, the bulk of the trade existing between Albany and Esperance on the one hand, and Fremantle and the Nor'-West on the other, is not sufficient to produce that financial result, so many hope will attend this new effort in communal activity. There must be development. There are few branches of commercial life wherein the complications and ramifications are so numerous as in that associated with the profitable conduct of the business allied with the successful working of cargo and passenger vessels.
Restricted Trade Possibilities.
There are few ports in the world sufficiently great to permit of lines of steamers confining their attention to them alone. It will be noticed that every terminal port is a sort of centre to which trade for transhipment flows. In a greater or lesser degree this is true of ports along a trade route; and it is in picking up this trade for places other than the terminals that steamship companies have been able to pay their way. To imagine that the extent of trade offering between North-West ports and Fremantle, and vice versa, that is purely local trade, is sufficient to keep a line of steamers profitably employed during the year, is to entertain perhaps a pleasing, but as results would show, a delusive trust. Had Fremantle been a port serving in its hinterland several millions of people and the North-West the home of a great wealth-producing population, matters might have been different. Conditions as they are, and not as they might be, have to be regarded, and form the only basis whereby it is possible to examine a situation such as the State-owned shipping venture has set in. How is the North-West line to pay? Here is the question which the Government and its financial and commercial advisers are anxiously considering, and which the taxpayer, who stands to lose or gain by the speculation, would also like to see satisfactorily explained. It is not the apex of Socratic wisdom never to prophesy unless you know. At the same time, so far as human experience goes, it may with all assurance be advanced that the State-owned steamship line to the North-West can never hope to be other than a drain on the public exchequer as long as its operations are strictly limited, as they will undoubtedly be, at least at the outset. There must be development, or financial chaos; and it is precisely when regarding the avenues of development open that the colossal difficulties there awaiting are realised. Development, until the halcyon days when the Commonwealth-owned steamers are sailing from Fremantle to the seven seas, only lies in one direction, to the North and North-West of the territorial area the State-owned ships are primarily intended to serve. Batavia, Sourabaya, Singapore, Penang, Calcutta, Madras, Colombo, and Bombay are the destinative ports of the State-owned ships. From all of these for years has come a cry to be delivered from "the iniquities of the shipping conference," to use a phrase that finds favour with the Press and many public speakers in these ports. A veritable cry from Macedonia has gone up, and Mr. Scaddan and his colleagues, having heard it, have possibly thought of answering it. If they make the attempt it will be against great odds--how great will be explained later. Mahan in discussing Nelson's victory of the Nile, and the charges of lack of circumspection made against the British admiral in method of attack, says:--"To say that under totally different circumstances different results will obtain is a species of prophecy with which no one need quarrel. If in the shock of war all things on both sides are exactly equal – if the two admirals, their captains and crews, the ships of the fleet, the tactical arrangements are equal, each to ench – there can be no result. When inequality, whether original or induced by circumstances, enters in any one of these factors, a result will follow proportional to the disparity." This criticism holds true equally in the arena of commercial warfare into which the State is so light-heartedly entering.
Competition With Shipping Conference.
Assuming for a moment that the State-owned ships make for only three of the oversea ports named above – Singapore, Colombo, and Bombay – what conditions have they to face? First, there will be a welcome from a number of merchants who, rightly or wrongly, do not consider they have been fairly treated by the masters of industry who control the shipping combine, or who, to put it otherwise, maintain they have for years been subjected to a squeezing process which has enabled the lines forming the conference to amass vast sums. Second there is the conference. Belonging to the conference are the British, German, French, Italian, Austrian, Dutch, and Japanese lines. In the North American, South American, and South African conferences many of the same concerns are represented. Hence it is that the State-owned steamships as soon as ever they leave Australia's shores will find opposed to them an antagonistic force of colossal wealth and power and of world-wide influence. The matter resolves itself, then, into a sort of Scaddan contra mundum. The question of back loading, on the assumption that Western Australia, the natural zone for the temperate clime products of these parts of Asia, can fill its State ships, is one which depends on a variety of conditions, not the least of which is the capacity of the State with its present limited population to absorb the quantities of cargo which even two vessels, making each monthly journeys, could bring down, if fully loaded. Whether State-owned vesels would get an ounce of transhipment cargo from North-West ports from Europe is a question which need not be laboured. The conference lines are not likely to touch such at a port of transhipment – for instance, Singapore or Colombo – and this would mean that cargo so consigned by a State-owned steamer would have to wait at the port of transhipment perhaps months before a tramp steamer happened along to take it. No merchant would ship under such conditions. The conference charges heavy freight rates, but in return it gives a regular and frequent service. It is not disputed that trade has been hampered owing to the working of the conference cum rebate system, but precisely how the conference is to be done away with, even though rebates are made illegal, is a question likely to more than tax the ingenuity of the proverbial Philadelphia lawyer. The more closely the consequences arising from the actual working of the State-owned steamship line are looked into, the greater the extent the task the Government has taken up appears to be. It is not the same thing as purchasing a tramway or railway system. No possible comparison can be instituted, because the whole conditions whereby the successful working of the different concerns are governed present no analogy. It is well that the Government should realise some of the things they will have to contend with, and, no less important, that the people, who will have to foot the bill, sbould be equally cognisant of them. Napoleon, after his fleet had been destroyed at Aboukir Bay, and he found himself stranded in Egypt, said to his troops when in despair, "We have laid on us the obligation to do great things." The present Government of Western Australia may be inspired with the same heroic sentiments. Mr. Scaddan is a veritable miniature David going out to wage battle with a colossal giant. Should he be successful his fame will extend to the four quarters of the earth, because he has opposed to him the highly-trained commercial ability of the world, no less than a great proportion of its wealth. In view of all this Mahan's words recur, "When inequality, whether original or induced by circumstance, enters in any one of these factors, a result will follow proportional to tha disparity."
