HL Deb 19 July 1904 vol 138 cc395-404

rose to move for a Return showing the quantities and description of manufactured goods exported from New York to South Africa during the two years ending 30th June, 1904, and the freight charged; also the freight charged on similar goods exported from the United Kingdom to South Africa. He said: My Lords, I do not think that any apology is required from me for again endeavouring to draw the attention of your Lordships' House to the great and growing injury caused to British trade by the action of British steamship companies in giving preferential rates to American shippers trading with South Africa. Although New York is over 600 miles further from South African ports than are the ports of the United Kingdom, the British steamship companies are carrying American cargoes to-day, and have done for some time past, at less than half the rates charged on similar articles consigned to South Africa from ports in the United Kingdom with the obvious result that trade which, under fair and equal conditions, would belong to the United Kingdom is being actually driven to America.

The noble Duke the Under-Secretary of State for the Colonies remarked last week that it was difficult to make any accurate comparison between American and English freights, because the classification was different. It is true that the British steamship companies, for some reason best known to themselves, classify goods from America under three heads, and goods which they ship from England under five heads. I do not understand why the Conference lines should not establish identical classification for British and American goods, as recommended by Mr. Henry Birchenough; but I understand still less why anyone who is in earnest in an endeavour to arrive at the truth cannot ascertain the rates charged on similar articles consigned to South Africa from American and British ports.

I have in my hand the manifest of a steamer which sailed for South Africa from New York last May. This manifest contains the description and quantities of the cargo carried and the freight charged. It is a confidential document, and I am not permitted to quote the name of the steamer, but I am permitted to hand the manifest to my noble friend the Under-Secretary of State for the Colonies, and I have no doubt he will diligently examine it. The noble Duke will see, on referring to it, the freight charged on manufactured goods from New York, and he will be able to ascertain, as I have ascertained, the class in which each article is placed in the English classification, and the freight charged from England. Such a procedure will show that the freight charge to Port Elizabeth is at the rate of 15s. per ton on nearly all articles from New York, and at rates varying from 22s. 6d. to 42s. 6d. per ton on similar articles from England. For example, 15s. is the rate on glass from New York, whilst the rate on glass from England is 31s. 3d., or 42s. 6d. if the glass is plate glass, in which case it comes under the rate charged for all articles in Class 1. Churns, horseshoes, brooms, hardware, ploughs, and agricultural implements are all charged 15s. per ton from New York, whilst 31s. 3d. per ton, or more than double, is charged from England. Leather, bicycles, and boots, which are all charged at the rate of 15s. a ton from New York, are charged at the rate of 42s. 6d. from England; and barbed wire, which goes at the rate of 15s. per ton from New York, is charged 22s. 6d. per ton from England.

This great disparity in freights has been the subject of anxious inquiry by various Chambers of Commerce in this country. The Birmingham Chamber of Commerce, in their report this month, point out the rates charged on articles manufactured in their district. They call attention to the fact that whilst the English rate to Cape Town and Algoa Bay on iron bedsteads, bolts and nuts, iron chains, general hardware, tinware, and tools is 31s. 3d. per ton, the American rates to Cape Town and Algoa Bay are only 15s.; and the same class of goods going from English ports to Natal and East London have to pay a rate of 40s. and 38s. 9d., whilst the rates are only 17s. 6d. from New York. Therefore, in regard to all these classes of manufactured articles, the American manufacturer has the great advantage of being able to secure the transit of his goods at less than half the freight which has to be paid by the manufacturer sending goods from this country.

I do not think my noble friend the Under-Secretary of State for the Colonies can have been aware of this difference when this subject was last debated in your Lordships' House, or otherwise he would not have cast doubt upon the suggestion of the noble Earl, Lord Portsmouth, that this difference in rate provided any ground for legitimate complaint. It was impossible for the noble Duke to deny that there had been a considerable increase in the total value of exports from New York to British South Africa. The figures I have obtained from the Board of Trade prove that. I find that the total value of exports (domestic and foreign) from New York to British South Africa for the year ended 30th June, 1901, was £2,498,397, and for the year ended 30th June,1903, £4,732,517; in other words, in two years the export trade from New York to South Africa has increased twofold. The noble Duke suggested that this might be a great advantage to the consumer in South Africa. He assumed that the increase was mainly in foodstuffs and did not consist of articles which could be sent from this country; but this manifest, which I will hand to the noble Duke, will show that a very large number of manufactured goods do find their way from New York to South African ports.

In order to verify the returns in the case of one steamer. I have obtained the Customs return, showing the value of the articles exported from New York to South Africa in another steamer, which sailed from New York last month. I hope I shall not be told by His Majesty's Government that it is impossible to obtain these figures. I have obtained them with little trouble, and I therefore assume that His Majesty's Government, with the powers that they command, can also obtain them. I find from this return that out of the total value of cargo shipped by this steamer, amounting to £85,930, almost one-third, namely £26,415, represented American manufactured goods. I will not go through the complete list, but the goods comprised furniture, windmills and parts, pumping machinery, barbed wire, etc., paint, oil, nails, curtains, table covers, clocks, candles, agricultural implements, ironmongery, household utensils, tools, etc. I may be informed that the bulk is not large, but His Majesty Government will discover, on looking into this matter, that the proportion of general merchandise to food stuffs in cargoes shipped from New York to South Africa is steadily increasing. I am not able on this occasion to quote figures to establish that point, but His Majesty's Government will be easily able to ascertain the truth of the statement I make.

Now, what is the result of these preferential rates given to American shippers over British manufacturers? As might be expected, the result is to give a great stimulus to American trade, and the American manufacturer under the advantage which he enjoys has been able to introduce into the South African market American manufactures which would not otherwise have found their way there, at least for some considerable time. A difference in freight of over fifteen shillings a ton is naturally quite enough to determine the destination of many orders. My noble friend the Under-Secretary of State said last week that Americans are very clever traders. I hope he will ponder over that statement. I am informed that the Steel Trust—as we all know, a most enterprising corporation—is endeavouring to capture the whole of the iron and steel trade to Brazil. They have approached steamship companies with the request that they may be granted a rate half-a-crown a ton below that charged on iron and steel products coming from Germany and England, and it is their belief that if they can get that advantage they will be able to capture the whole of the iron and steel trade of the Brazils. Now, if an advantage of half-a-crown is sufficient to divert trade from England to America, it is a fortiori obvious that a difference of 15s. a ton in favour of the American manufacturer must tend to kill our own industries.

I would point out to His Majesty's Government that we have had ample warning of this danger. There was a most interesting Report by Mr. Benjamin Morgan, who was appointed Special Commissioner to report on the engineering trades of South Africa. Mr. Morgan went out in 1902, and, in the Report which he presented, he stated— If certain goods can be obtained in England, America, and Germany at even prices any difference in freight would settle where the order would go. The difference in freight charges alone was practically a profit. Store merchants everywhere looked through their stock sheets and completed their stocks with American goods, particulary in hardware lines and agricultural machinery. I was informed that one merchant ordered 1,000 stoves, another 3,000 ploughs, and so on, as a result of this difference in freight. In another portion of his Report Mr. Morgan said— The difference prevailing in freights from New York and London respectively to South Africa was the cause of a number of large orders going to America every year. He quoted a typical instance given to him by one of the largest firms of engineers and machinery merchants in South Africa. A short time ago a certain firm invited tenders for 700 tons of steel. Our tender was second. The American firm who secured the order paid 15s. a ton less in freight than we This was more than the difference between our prices. The warning given by Mr. Morgan was confirmed the following year by Mr. Birchenough, who, with the view of enabling the British public to understand what effect the preferential rates to the American shipper had on British trade, pointed out in his Report, dated August last year, that the Scotch "Dover" stove was 2s. 6d. to 3s. cheaper than the American stove free on board, but landed in South Africa the American stove became the cheaper of the two. About five stoves go to the ton, and Mr. Birchenough pointed out that the freight from Great Britain was 32s. 6d. per ton, or, say, 6s. 6d. per stove, whilst the freight from New York was 10s. per ton. or 2s. per stove. The difference against the Scotch stove was, therefore, 4s. 6d., which made its landed cost in South Africa from 1s. to 1s. 6d. higher than that of the American stove, in spite of its lower free-on-board cost of from 2s. 6d. to 3s.

Mr. Birchenough said that so long as the 10s. rate lasted merchants were tempted not only to fill up their stocks of heavy articles, such as agricultural implements, fencing wire, machinery, etc., but to make up cargoes with any articles which seemed likely to sell. Mr. Birch-enough summed up the whole situation in these words— No single circumstance has proved so favourable to the rapid growth of American trade with South Africa as these low freights, and we owe them to the action of British shipping companies. I hope, my Lords, that I have established the fact that there is an important difference to the advantage of the American shipper, and that that preference does tend to affect most injuriously the interests of British traders.

In the Yorkshire Post last week I found an advertisement of the Prince Line, which has regular sailings from New York to South Africa. There are quoted the prices charged from New York—viz., to Cape Town and Port Elizabeth, 15s.; East London and Durban, 17s. 6d.; and Delagoa Bay, 22s. 6d., and the advertisement goes on to say— As most of the Prince Line South African steamers proceed from the United Kingdom to New York to load for South Africa, they are prepared to carry, in steamers thus proceeding, a limited quantity of cargo at above rates from the United Kingdom to South Africa, via New York, without transhipment. That shows that under the present rates operating from New York British shipowners wishing to do trade with South Africa find it profitable to cross the Atlantic and then take a journey which is longer by 600 miles than the journey from British ports to South Africa. It is to the advantage of British shippers to send their goods viâ New York to South Africa, although it is a distance of 600 miles further.

The Chambers of Commerce are beginning to inquire seriously into the position, and I hope His Majesty's Government will not put us off with statements that it is difficult to obtain these figures, but that they will seriously consider the position, with a view to suing how far they can protect British industry, which ought to be their first care. The cause of this injurious preference which the American shipowners enjoy is the additional 10 per cent. levied by the Conference lines on goods from this country, which is remitted if the shipper has not shipped any cargo by competing lines in the interval. The rebate system and its accompanying penalties are illegal in the United States, and I ask the House to consider whether this is not the secret of the whole position. The American Government regard this system which operates so injuriously to the British trader as a direct restraint of trade, and the result of their legislative action has been to make it impossible for the rebate system to be established on goods shipped from New York to South Africa. I believe that to be the cause of the preference.

Now, what is the result of the preference? The result certainly is to send to America trade which properly belongs, under fair and equal conditions, to this country. I do not think it matters so much to the manufacturer. He can, if he likes, set up his works in the United States, in order that he may enjoy the advantage of cheaper freights; but the British workman is put out of employment and has a legitimate cause of complaint against His Majesty's Government. The noble Duke, at the close of his speech the other day, pointed out that the question of getting a better rate for the public was entirely outside the province of the Crown Agents. It was, he said, a matter which the Government alone could undertake or examine, and it was very doubtful whether it would be wise for His Majesty's Government to do so. South Africa has given us a 25 per cent. preference on our goods, and I believe the Government are to blame for allowing this rebate system to continue on the export of goods from England, with the result that we lose the whole benefit of that 25 per cent. preference, and are driving trade to America which ought to belong to England.

The Natal and Cape Governments, so we are informed by the noble Duke, have convened a conference to look into this question of rates. They will, however, look into it from the point of view of the consumer. The noble Duke said— Until we know what the result of the conference is, until we are informed of the wishes and views of the people of South Africa themselves upon this subject, it would be premature for His Majesty's Government to offer any opinion upon such a difficult and complicated matter. I say it is the duty of His Majesty's Government to look after the interests of British workmen and British manufacturers. There is a remedy which I have often been told is impossible for His Majesty's Government to apply, but I contend that it is within the power of the Government to effect a combination of shippers. There ought to be very little difficulty, if His Majesty's Government would co-operate with the Administrations in Natal, the Transvaal, the Orange River Colony, Cape Colony, and Rhodesiain forming an independent shipping combination, which would enable them to secure, not only for themselves, but for the public, the advantage of the cheap rates which American shippers now enjoy from New York and other American ports. I beg to move the Motion standing in my name.

Moved, "For a Return showing the quantities and description of manufactured goods exported from New York to South Africa during the two years ending 30th June, 1904, and the freight charged; also the freight charged on similar goods exported from the United Kingdom to South Africa."—(Earl, Grey.)


MY Lords, in answer to my noble friend, I have to state that the Board of Trade can give the quantities of the principal classes of manufactured goods exported from the United States of America to South Africa in the years mentioned, but I regret to say that the Department have no official figures dealing with the freights asked for in the Motion, and I fear that a Return of the exports without the freight figures would be of little service to the noble Lord. As the noble Lord is aware, freights are not fixed within maximum powers as rates are fixed for the carriage of goods by railway. They vary with the circumstances of the trade, and are difficult of ascertainment. I shall, however, be happy to discuss with the noble Lord the question whether any figures can be supplied for the purposes of the Return which would be useful to him.


I understand the noble Lord to say that he can give official figures showing the value of the exports?




Perhaps he will give us a Return to that effect.


Yes; I can promise that; but I cannot give official freights.


Although the (noble Lord cannot give us all the official freights, it must surely be within the power of the Government to obtain from shipping companies the rates that have been charged.


The Board of Trade are unable to give official figures as regards freights. They might be misleading.


I accept the noble Lord's kind invitation to talk the matter over with him; but if the result of our conversation does not convince me that the Government are in earnest in putting an end to the pernicious practice which is driving trade from this country to America, I hope I may have the opportunity of taking such further action as the rules of the House allow.


Are we to understand that it is impossible for the Board of Trade to obtain these figures? I should have thought there would have been no special difficulty in doing so; and, as an illustration of the new policy of maintaining the Empire by differential tariffs, it would have been rather instructive.


I understood my noble friend to say that there were no official figures available of the kind the noble Earl desired, and, the noble Earl's counter suggestion was that figures might be obtained from private sources. That suggestion I understood the noble Lord who represents the Board of Trade to be unable to accept on the spur of the moment, but he indicated his desire to confer with the noble Earl and to meet his views as far as possible.

Motion, by leave of the House, withdrawn. House adjourned at twenty minutes past Five o'clock, to Thursday next, a quarter past Four o'clock.