THE RESERVATION OF THE COASTAL TRADE. (Hansard, 25 June 1903)

LORD MUSKERRY
, who had given notice "To call attention to the recommendation of the Subsidies Committee and the Resolution adopted at the Con 530 ference of Colonial Premiers regarding the reservation of the coastal trade of the British Empire, and to the fact that British shipowners are subjected to unfair competition owing to the coastal trade of practically all the foreign maritime powers being reserved to their own ships; and to move to resolve 'that 531 in the opinion of this House it is desirable that legislation on the terms of the recommendation of the Subsidies Committee and the Resolution adopted at the Conference of Colonial Premiers should be initiated by His Majesty's Government,'" said: My Lords, it is unnecessary for me to detain your Lordships at any great length in calling attention to the most important subject of the reservation of the coastal trade of the British Empire, especially when we have regard to the views which have been recently expounded by some of the leading members of His Majesty's Government in the way of the adoption of a system of preferential tariffs, which shall serve to still further consolidate the British Empire, and to draw closer the bonds of unity between the colonies and the mother country. I feel therefore that only a favourable answer can consistently be given to my advocacy of His Majesty's Government taking steps in reserving the great shipping trade, not only on our own coasts, but between this country and our colonies and vice versa, to British ships.
I think your Lordships cannot but agree that it is a grave scandal that, for instance, foreign ships should actually be permitted, and do trade in competition with British shipowners in the coastal trade between ports in the United Kingdom, and, to go farther afield, they may trade between this country and our own colonies at an advantage against British shipowners, owing to their not complying with what are called "restrictions" upon British shipowners—praiseworthy "restrictions" I call them—for the ensuring of safety of life at sea. No doubt your Lordships would like to have some information as to what is the attitude adopted by other maritime Powers in regard to their shipping trade, and I may say that amongst those who will permit none but their own ships to carry on trade on their own coasts, or between their own ports and their colonies, are Belgium, France, Russia, Italy, Portugal, Spain, Brazil, United States, Egypt and others. As an instance I may explain that up till quite recently a very large trade was done by British ships bringing grain cargoes from Russian ports in the Black Sea through 532 the Mediterranean and round through the Baltic to St. Petersburg and other North Russian ports, which, as your Lordships know, is a voyage of some considerable duration. Russia is now, however, reserving to herself her coastal trade, and all this trade which has been carried on by British shipowners is lost to them. At the same time a Russian vessel is perfectly free to trade between British ports, and under more advantageous conditions, as I have previously explained, than British ships.
My handsare considerably strengthened by two recommendations which His Majesty's Government cannot possibly ignore. One is that of the Subsidies Committee, which has recently concluded its deliberations. On referring to their Report I find it stated that:— This class of restriction appears to be on the increase, so that the field for British trading throughout the world is becoming gradually but surely circumscribed. The United States, extend the doctrine so as to declare a voyage from New York round Cape Horn to San Francisco, or from San Francisco to Honolulu, to be a coasting voyage, and as such they restrict it to vessels carrying the United States flag. Similarly, France refuses to allow any but French vessels to trade between French ports and Algeria; and Russia, in reserving its coasting trade to its own flag, includes in this restriction the navigation between Russian ports in the Baltic and the Black Sea, and between all Russian ports and Vladivostock in the far east of Siberia. Such restrictions have seriously affected British trade. This will be no cause of surprise to your Lordships. Sir Robert Giffen, a very high authority, estimated that there would be a gain of 9 per cent. in trade by British vessels, and he stated that this was a considerable advantage. He did not fear reprisals, for, as foreigners already reserved their coasting trade, they would have no cause of complaint. The Committee say that Sir Robert Giffen's evidence as to the reservation of British Imperial coasting trade to British ships deserves very careful attention. The Committee desire specially to point out that as the coast-line of the British Empire is the greatest of any country in the world, Great Britain need have no serious fear of effective retaliation, even if most of them did not already do what is now suggested for Great Britain. The Committee think that the occasion has come when the question of the qualified reservation of British Imperial coasting 533 trade on the lines indicated should be considered by His Majesty's Government with a view to reserving the British and colonial coastwise trades and the Imperial coasting trade within the British Empire to British and colonial ships and vessels of those nations who throw open their coasting trade to British and colonial ships. The plain truths to which the Committee have drawn attention in this direction, and the very strong opinions they hold, make it imperative that your Lordships should not allow them to be relegated to the Parliamentary dust-heap where so many Blue-books bear testimony to futile labour and expense. I have the satisfaction of not only basing my remarks on this Motion upon the Report of the Subsidies Committee, but upon one of the most important Resolutions passed by the Conference of Colonial Premiers held in this country last year, which is destined to bring about a revolution of the principles upon which British trade has been carried on for many years. The question of preferential tariffs, which was also the subject of a Resolution by the Conference, is one in which His Majesty's Government are already moving, but, of course, this, as I understand His Majesty's Government to say, will require very deep thought and consideration to arrive at some practicable and workable scheme if the same appears advisable. Not so with the reservation of the coastal trade, for this has been thoroughly gone into by the Subsidies Committee, and valuable statistics are immediately at hand; therefore, so far as I can see, then is really no difficulty in the way of His Majesty's Government at once taking steps to carry out in practice the recommendations of the Subsidies Committee and the resolution of the Colonial Premiers, which is as follows— That it is desirable that the attention of the Governments of the colonies and the United Kingdom should be called to the present state of the navigation laws in the Empire, and in other countries, and to the advisability of refusing the privileges of coastwise trade, including trade between the mother country and its colonies and possessions and between one colony or possession and another, to countries in which the corresponding trade is confined to ships of their own nationality, and also to the laws affecting shipping, with a view of seeing whether any other steps should be taken to promote Imperial trade in British vessels. As the noble Marquess the Secretary of 534 State for Foreign Affairs has told your Lordships— Those distinguished colonial statesmen came here on purposes of business, and it is impossible having these Resolutions before us lightly to brush them on one side. They, my Lords, evidently recognise the supreme importance of cohesion and the consolidation of the interests of the Empire. What can be more important than our shipping industry and the maintenance of our sea commerce? It is of the most vital interest to our Empire; it is the industry which has principally contributed to make the English power what it is; it is what binds the mother country to our colonies and possessions abroad, and the decline of this industry would inevitably lead to the decline of the Empire.
I take it that the first duty of the Royal Navy is the protection of the commerce of Great Britain. Rightly this Navy of which we are so proud is being augmented and kept in a high state of efficiency, but it is an extraordinary thing that practically nothing is done by the Government to keep up the efficiency and prosperity of the Mercantile Marine, which necessarily is our first reserve. The principal reason for maintaining such a large fleet of war vessels being the protection of our British merchant shipping, it seems to be a most serious neglect on the part of successive Governments of this country that no consideration should be extended to an industry which is the mainstay of the nation, but rather that every encouragement is extended to foreign vessels to compete against our own. And now, my Lords, I earnestly trust that you will support me in urging His Majesty's Government to take the necessary steps in carrying out a reform which will be of the greatest encouragement and assistance to British shipowners in the severe competition with which they now meet, and which is getting keener and keener as time goes on. In encouraging British shipowners you are also fortifying and nursing our splendid merchant service which performs a national duty, and which in reality is the very life-blood of our Empire. I will, in conclusion, read to your Lordships a letter I received two or three days ago which shows the existence of a very startling state of affairs:— I have been an officer in the mercantile service, and at present I am a Port Sanitary 535 Inspector on the River Thames. Like myself, the majority of my colleagues have in their rime had command both in steam and sail. Each man of us, in the pursuit of our calling, inspect, on an average, about 3,000 ships per annum; it will thus be seen that for practical experience of the service ashore and afloat, in no other Port in the Kingdom can the same practical information on this phase of the question be had I am not going to give my opinion on the matter, but I will try to put before you the unanimous opinion of my brother inspectors, all old shipmasters, all sanitary inspectors. The first thing that we have noticed is that of late years nearly all the old clipper ships have been sold; a few only are left and the best school for training the young seamen is now a limited one. Most of these old iron ships are yet running with reduced crews under foreign flags—German and Norwegian, for the most part. The percentage of foreign bottoms using the port is increasing by leaps and bounds, one reason of this being that, within the last twenty years, factory after factory has had to shut up owing to being ruined by foreign competition—glass works, chinaware, hardware, bottle-making, toy-making, pianos, musical instruments, cabinet-making, seed-crushing, and many others. One of the last down here in East London to collapse … held out bravely, but they had to give in, and 1,600 men were thrown out of employment, and over £2,000 in wages lost to the district weekly. The reason that the loss of an industry down here means an increase in foreign ships using the port is that as soon as the foreigner has firmly started on a firm basis the trade we have lost, he always sends the goods by one of his own, or his own country's ships, because it is probably cheaper, and it is patriotic at the same time. So you see loss of manufactures means in the end loss of transport. If the foreigner can export in his own bottoms, and make it pay, so could we if we had protection. We do not know what is going on in Liverpool, but of recent years the number of foreign ships trading on our coast without a break is on the increase, and, so far as London is concerned, we have foreign ships, mostly German and Norwegian, all the year round carrying coal from Newcastle, stones from the Channel Islands, coal from South Wales, clay from Poole, grit from Brideport, stone from Portland, and only the other day a small German schooner brought up to London a cargo of cement from Rochester—free trade with a vengeance. Although I am unable to say what good this state of affairs is to the country, I can tell what the harm is. Thousands of pounds sterling per week for freight are leaving the country that might remain here, and thousands of our seamen are out of work, many in despair have become casual labourers, or joined the ranks of the chronic unemployed. Again, of late years, a large percentage of foreigners, mostly German, Norwegian, and Italian, have taken to trade entirely between London and our own colonies. They never go in any other trade; they load here of set purpose, because it pays them best. The obliging foreigner, not content with doing our own coasting trade, is thus gradually cutting into 536 our own colonial trade, and, as a matter of fact, any day a half dozen of these foreign ships, with not a single Britisher on board, may be seen loading in the South-West India Dock for the colonies. This state of affairs is gradually getting worse and worse all the time; the number of foreign boarding houses for foreigners is on the increase, the home people are being frozen out altogether, and bands of raw young German seamen are brought over here and touted and foisted upon any one that will hive them. I constantly meet these young men on our own coasters, and of course the supposition is that before they get there a certain amount of blood-money changes hands. Not only is the English A.B. being ousted, but many British ships carry no English officers, save perhaps the Master. Indeed, only last week the 'Loch Broom' came over from the Continent without a single British officer, and what officers there were had no certificates. This is constantly recurring. The Board of Trade Regulations are a mere farce—something like the Regulations to Board of Trade Surveyors re crew quarters, never by any means carried out unless by accident. If this weakening of the service continues, in time it will mean that there will soon be a weakening of the Royal Naval Reserve; apart from that, in time of war the ships will require coal and stores and other transport. I take it tins is a most important point. Of course, if the aliens who now man nearly half the mercantile navy will do the fighting, repair the wastage in the Navy, and do the transport and feed the people of England at the same time, then no more need be said; but Sir, the sea is our birthright for us and our boys, and if you can do anything to keep us from being ousted from our own ships and from our own trade with our brethren across the sea, you will have earned the gratitude of all British seamen. I have taken the trouble to inquire whether the facts stated in this letter are true, and I find that they are. Surely, therefore, it cannot be denied that they indicate a serious state of affairs which cannot be allowed to continue.

LORD WOLVERTON
My Lords, as I understand the matter, it is not so much the coasting trade, in the narrower sense of the term, of the United Kingdom, and of the various colonies and dependencies, as the trade between the 537 different parts of the Empire that has to be borne in mind. The total tonnage of vessels entered and cleared annually in the trade between different parts of the British Empire — that is between the United Kingdom and the various colonies and possessions, and between the colonies and possessions (counting the Australian States as separate colonies, but not including any of the colonial coasting trade strictly so called) — is 36,814,000 tons, of which 32,310,000 tons are British and 4,504,000 foreign. Thus the percentage of British is 88 and of foreign 12. So far as the United Kingdom alone is concerned, 94 per cent. of the tonnage engaged in the coasting trade appears to be British. Such colonial figures as are available show a proportion of 96 per cent. British and 4 foreign. Of these small percentages of British coasting trade and trade between different parts of the Empire only a small fraction would be affected by the Resolution of Colonial Premiers, or the recommendation of the Committee. It should be borne in mind that, although France reserves the trade between the Atlantic and Mediterranean seaboards, and also the trade between France and Algeria, the carrying trade between France and her oversea colonies is open to foreign vessels on equal terms with French vessels. Also that, with certain relatively unimportant exceptions, five out of the seven principal foreign countries with oversea possessions—France, Germany, Holland, Denmark, and Portugal—throw open the carrying trade between the mother country and those possessions; but in the case of Germany the preference she gives by subsidies must be taken into account. Russia and the United States alone reserve the whole or the greater part of their trade between their distant coasts and with oversea possessions to national ships. Therefore the question, as limited by the Resolution of the Colonial Premiers, practically affects Russia and the United States alone, and the immediate consequence of giving effect to the Resolution would consequently be small. But the principle involved is important, and is so closely connected with the question of Fiscal Policy now under consideration that the Government must decline to make any separate pronouncement upon it at the present time. With 538 regard to the Report of the Subsidies Committee generally, I may say that the President of the Board of Trade was recently asked in the House of Commons how far the legislation applying at present to British shipping trading to ports in the United Kindom could be extended to vessels belonging to foreign owners, and in reply Mr. Gerald Balfour suggested that the most convenient course would be for a Member of the House of Commons to introduce a Bill embodying the views of the shipowners, and that the Government would be prepared to give favourable consideration to such a Bill on the understanding that, if read a second time, it should go to a Select Committee. I conclude that the noble Duke would adopt a similar course in the event of a Bill being introduced in this House. I trust that my noble friend will not press his Motion.

LORD MUSKERRY
May I take it that the question will not be lost sight of by the Government?

§ THE SECRETARY OF STATE FOR FOREIGN AFFAIRS (The Marquess of LANSDOWNE)
As this important question is connected with the larger question of the Fiscal Policy which the Government has now before it, the noble Lord may take it that neither one nor the other will be lost sight of.