HL Deb 22 May 1905 vol 146 cc920-31

LORD MUSKERRY rose "To call attention to the action of foreign maritime Powers in closing certain spheres of trade in which British ships have hitherto been engaged, with particular reference to the Philippines, Canary Islands, and the Marshall Islands trades; to ask whether any further information can be afforded regarding the negotiations which have passed between His Majesty's Government and the United States, German, and Spanish Governments on the matter; whether, if the position is still adverse to British ships, any steps are contemplated in protecting them from unfair competition; whether it is a fact that His Majesty's Government have reserved the water frontage of the British concession at Hankau to British ships, and, if so, whether the reports are correct that the restriction is evaded by foreigners registering their vessels as British vessels under the Companies Act in Hong-Kong."

He said: My Lords, though the notice I have given appears to be a comprehensive one, I shall endeavour to confine myself as closely as possible to the points at issue. My object in calling your Lordships' attention to these several matters and asking for further information regarding them is to show that foreigners are closing the door to our greatest Industry whilst the Government, up till the other day at all events, have taken no steps to prevent it except in one case which I will mention later on. I am aware that I may seem to be bordering upon a thorny and much-debated subject, but I contend that this question of our merchant shipping should not be looked on either from a free-trade or protectionist point of view. The question of free trade or protection is never brought forward in connection with the Royal Navy or the Army. As the Militia is the reserve of the Army, so is the merchant navy the reserve, and the only reserve, of the Royal Navy. On the merchant navy you depend for your food supplies, and for the transport of troops and munitions of war; and our merchant ships are the most material of the bonds that bind the Empire together. Our great shipping lines I may liken to the arteries running from the heart of the Empire to all our Colonies. The merchant navy is financed by private individuals, but nevertheless it is a national service of the greatest importance, and it is the duty of the Government to encourage and protect it.

It is ridiculous to suppose that whilst we permit and encourage the foreigner to compete with us at advantageous terms, we should also allow him to debar, under any consideration whatever, any competition of ours in the countries over which he has dominion. The foreign shipowner is at present playing with us that interesting game known as "Heads I win, tails you lose." Whilst the foreigner is free to trade wherever he pleases, I find from the Report of the Steamships Subsidies Committee that British ships are not allowed to participate in the coasting trade of the following maritime countries:—Belgium, France, Russia, Italy, Portugal, Spain, Brazil, the United States, Egypt, and others.

When I brought this subject of the coastal trade before your Lordships last year I was replied to by the noble Marquess the Secretary of State for Foreign Affairs, and on June 28th, some days afterwards, I received the following letter from Messrs. Burt, Boulton & Hay wood, Limited, of Cannon Street, E.C., viz.— My Lord,—In reply to a question of yours asked in the House of Lords, Lord Lansdowne is reported in The Times of Tuesday, June 14th, to have replied as follows:—'Out of the seven Powers which do a large amount of coasting trade, four—Germany, Denmark, Holland, and Portugal—admit our vessels freely to their coasting trade. France does the same with the exception of Algerian trade, which is specially reserved.' We felt sure at the time that this reply was reported that it was not entirely accurate, and that Lord Lansdowne had been misinformed, but, to make sure, we made a direct inquiry of the Ministers de Commerce in Paris, through our Paris house, and received the positive assurance that affairs are exactly as they have been for many years past in France, and that foreign vessels are prohibited from coasting between French ports proper, and between French ports and Algerian ports and vice versa. No doubt others will have written to you pointing out the discrepancy between Lord Lansdowne's statement, as reported, and the facts, but you would be doing great service to British shipping if you would kindly follow up the matter further, and endeavour to obtain some public correction from Lord Lansdowne of the error into which he has been led.

Yours faithfully,

Burt, Boulton & Haywood, Limited.

(Signed) HAROLD BOULTON, Director."

To such an absurd and unfair pitch has this reservation of the coastal trade got, that in Russia it includes a voyage from the Black Sea to St. Petersburg. Here a once lucrative British trade has been shut out by one fell swoop. Russia also declares it coastal trade from St. Petersburg or any Russian port to Vladivostock. Again, a British ship cannot—or rather, is not allowed to—carry a cargo from New York to San Francisco, or from any American port to Honolulu, for in the eyes of the United States this is a coasting voyage. Therefore, one of our ships seeking a cargo in New York has the whole of the United States sea-board and the Sandwich Islands wiped off her chart.

The latest move of the United States is that, on the 1st of July of next year, the Philippines are to be included in the same category; thus British ships after that date may say good-bye to another trade which has been practically theirs up till now. At the recent annual meeting of the Sunderland Shipowners' Society, the chairman said— Unfortunately the United States were closing their Philippine trade at the end of July of next year. That was a matter which affected them very keenly, as it employed a large amount of tonnage.

We cannot but sympathise with our shipowners when we see their limits of trade becoming more and more restricted, whilst at the same time the foreign competition they have to contend with is growing keener and stronger every day. Surely, my Lords, it is full time for His Majesty's Government to take action in this matter. Though in a comparative sense it does not appear to be of much magnitude, it is another encroachment on our shipping trade that the Spanish Government have decided to reserve to Spanish ships the trade between the different islands of the Canaries. The present trade, as it is carried on, provides a living for certain British owners, captains, officers, and men who shortly will perforce require to look elsewhere for the employment of which they have been deprived by foreigners. We found it so when large British lines trading from Singapore and Shanghai were sold to foreigners that the British captains and officers were displaced at the earliest possible time. I understand that the Secretary of State for Foreign Affairs has informed the Merchant Service Guild that this question of the reservation of the Canary Islands trade is engaging the attention of His Majesty's Government—I hope with better success than that which attended their negotiations anent the Philippine Islands trade.

With regard to the action of the Germans in freezing out British trade with the Marshall and Caroline groups of Islands in the Pacific, this was lately brought before your Lordships' House by my noble friend the Earl of Jersey, and the noble Marquess the Foreign Minister a short time ago told your Lordships the nature of the communication he had received from the German Government. I see that the Federal Prime Minister took a very practical and forcible view of the situation in saying that if the Imperial Government obtained no redress for them they would retaliate by severely penalising German trade with Australia. I cannot help thinking that this statement of the Federal Prime Minister had some influence on the terms of the reply given by Germany to the noble Marquess.

The final, and what I consider the most important, matter to which, with your permission, I would allude is that, if reports are correct, the British Government have already taken steps in protecting British trade from the opposition of the foreigner. When on previous occasions I have advocated steps of the kind in this House the replies I have received have proved to be most unsatisfactory. But it is deeds, not words, which tell, and it affords me ample satisfaction when I hear that His Majesty's Government carry into practical effect that which in this House they have poured cold water upon. In the year 1861 the British Government secured from the Chinese the perpetual lease of a piece of land some 2,750 feet in length by 1,250 feet in breadth, situated on the left bank of the Yangtze, about fifty yards below the native city of Hankau. On this piece of land an important and prosperous tradecentre has been built up, and is known is the British concession at Hankau. As was to be expected, foreign competition became keener and keener until, finally, the George McBain line of steamers, tinder the British flag, and having certain important rights in the concession, was sold to the largest and most powerful of the Japanese shipping companies—the Nippon Yusen Kaisha. Thinking that the British Government would maintain their usual non possumus attitude, they naturally concluded that the rights and privileges of Mr. George McBain as a British subject in the British concession at Hankau would accrue to them as part of the goodwill of the business they had bought. The bona fide British shipowners trading to the concession took alarm, however, and saw that their interests would in all probability suffer very seriously. An appeal was made to the British Government, who, it appears, have decided to reserve the sites at this British concession to British national shipping,

I am relying on The Times correspondent at Shanghai for most of my details. Owing to the presence of foreign voters on the concession at Hankau it is said that the Foreign Office have supplemented their decision by laying it down that in case of necessity British votes alone should be considered. This step, if it has actually been taken by the Government, is of far-reaching importance. The magnitude of it can hardly be realised at the moment, for it is, I think I am right in saying, the first practical and drastic method they have adopted in preventing foreign encroachment on the rightful preserves of the British shipping trade. If, as I hope to hear, my statements are in accord with fact, I would also like to know whether the decision of the Government has been checkmated by the Japanese company referred to. So far as can be gathered, this company have now, at Hong-Kong, registered their vessels as British ships. It is said that this is in accordance with the law, although a glance at the composition of the company shows that two clerks of the Japanese company are the principal shareholders, and that the only difference is the flag the ships fly. I may say that the Japanese are by no means the only offenders in this respect.

The reports of The Times correspondent at Shanghai are so detailed and circumstantial as to warrant credence being given to them. I do not suppose that His Majesty's Government are going to allow foreigners, under the guise of Britishers, to circumvent a decision they have arrived at, and no doubt the noble Marquess representing the Foreign Office can give satisfactory assurances on this point. I hope your Lordships will not think I have unduly trespassed upon your indulgence. Though we are yet paramount as a shipping Power we are too apt to forget how keen, how determined, and sometimes how unscrupulous foreign competition has become. It behoves us to meet it before it overwhelms us, for when our shipping trade is threatened it is an attempt not only to cripple our greatest industry, but to strike a blow at the foundations of the British Empire. I beg to put the Questions standing in my name.


My Lords, I shall certainly not gainsay what has fallen from the noble Lord as to the importance of our merchant service, of whose interests he has shown himself a vigilant and assiduous advocate. Nor shall I contradict him when he tells your Lordships that he regards as extremely unfair to this country the existing arrangements under which, while the coasting trade of Great Britain and her dependencies is freely open to the shipping of other countries, the coastal trade of some at all events of those countries is entirely closed against British shipping. I am afraid, too, that the noble Lord is not inaccurate when he says that the tendency to impose this restriction is an increasing tendency, and it is, as he truly said, aggravated by the fact that, when speaking of coasting trade, we refer, not only to coasting trade in the narrower sense of the word—trade between one portion and another of the United Kingdom—but also to that much more extensive trade passing between one national port and another national port, such, for instance, as the trade carried by vessels plying between a Black Sea port and St. Petersburg.

The noble Lord left us to infer the remedy which he would propose in order to combat this condition of things. I would venture to remind your Lordships that, so long as nothing is done by foreign Powers to infringe the treaty rights of this country, we have no title to complain if a foreign Power chooses to restrict its coasting trade, or any other part of its trade, to its own subjects. All we can do is to consider whether it is worth our while to use pressure, and, if so, to what extent, in order to bring about a mitigation of our grievances.

It is sometimes suggested, and I rather think that that is virtually the suggestion of the noble Lord, that we should follow the example of other countries and reserve entirely to our own shipping the coasting trade of Great Britain and her dependencies. But that is not a remedy to which we could light-heartedly resort. It would carry us too far, for of the Powers which participate largely in this coasting business four, at any rate, admit us to their coasting trade. In regard to a fifth Power, France, I will make a point of inquiring very carefully into the matter after what the noble Lord has said, but I am under the impression that France allows British vessels to participate in her coasting trade except that which passes between French ports and ports of the Algerian provinces. Then, if we were to debar foreigners from participation in our coasting traffic, we should diminish, or perhaps lose entirely, that extremely valuable entrepôt trade in which this country has a large interest. It must be remembered that many foreign vessels coming to our ports bring us their merchandise for reshipment to some other country, and it would certainly be a misfortune if that branch of our business were to be taken away from us. Then it is suggested that we might deny our coasting trade to those countries which do not admit us to theirs. But there we are met with a formidable difficulty—namely, that the countries which most completely exclude us from their coasting trade are precisely the countries which take the smallest part in our coasting trade. The Powers which I have in my mind are the United States and Russia.


I included inter-coastal colonial trade.


I am quite aware of that, but I do not think it affects the argument I am using. Although there is the inequality which I have admitted, it cannot be said that at this moment, at all events, foreign countries monopolise any considerable share of our coasting business. The figures are rather striking. I believe I gave them to your Lordships last year, but I do not hesitate to repeat them. Of the smaller coasting trade around our shores no less than 99 per cent, is in the hands of British shipping, while of the larger Imperial coasting trade no less than 88 per cent. is done by British shipping and only 12 per cent. by foreign vessels. Another suggestion is that we should, at any rate, insist that such foreign vessels as ply to British ports should be compelled to comply with those regulations and legislative enactments by which our own shipping is bound. There is at this moment, certainly, an inconsistency, and a most inequitable inconsistency, in allowing, say, a Norwegian timber ship to come to a British port without complying with those extremely salutary regulations of which the noble Lord has often spoken in this House and which are, to a certain extent, a burden on the shipping of this country. A Committee of the House of Commons was appointed last session to deal with this matter. I believe that the time at their disposal was not found sufficient to enable them to arrive at a conclusion, and it has been lately announced that the Committee is to be reappointed this year. I am sure we must all hope that they will see their way to making practical and satisfactory recommendations on this important branch of the subject.

The particular cases which the noble Lord cited illustrate very fairly the great difficulty of dealing with this problem. In the first instance there is the case of the Philippines. When the United States made peace with Spain they undertook that for ten years Spanish shipping should have equal treatment with United States shipping so far as the trade with the Philippines was concerned. Last year a Bill passed the United States Legislature under which all foreign shipping, except Spanish, is excluded from trade with the Philippines, that trade being reserved as coastal trade by the United States Government. The Act in question will not come into operation until 1906. When we became aware of this we put in a claim in favour of our shipping, urging that, as we were entitled to most-favoured-nation treatment at the hands of the United States Government, we might claim the same treatment for our shipping that the United States Government had bound themselves to accord for ten years to Spanish shipping. We were met with a reply, perhaps not entirely unexpected, which goes to show that the interpretation placed by the United States Government upon most-favoured-nation treatment differs materially from our interpretation. The United States Government hold, and, I believe, have held for some time, that the existence of an international compact, under which they are bound to give most-favoured-nation treatment to any particular Power does not preclude them from making by treaty with another Power for value received special arrangements entitling that other Power to exceptional privileges or advantages. The United States Government hold that in this case their arrangement with regard to trade with the Philippines is such a special arrangement, and is not of a kind which entitles other nations to claim equal treatment on the ground that they have most-favoured-nation clauses with the United States. That is how the matter stands, and I am sorry to say that I do not see much prospect of inducing the United States Government to abandon that view. But I would ask the noble Lord whether it is not possible to exaggerate the dimensions of the difficulty which has arisen. This special arrangement between the United States and Spain runs for ten years from the date when it was made. It will, therefore, expire in 1908 or in the beginning of 1909, but the trade of the Philippines will only begin to be treated as coastal trade and reserved to the United States in 1906. We are, therefore, only discussing a trade which is, after all, not of first-rate importance, and which, in any circumstances, could be withdrawn from us after we had enjoyed it for the space of about two years; for I need not say that when the special arrangement between the United States and Spain comes to an end, we shall no longer be able to claim most-favoured-nation treatment.

The second case referred to by the noble Lord was that of the Canaries. I find that in November of last year it was declared under Royal decree by the Spanish Government that trade between the different ports of those is lands should hence forth be treated as coastal trade. When that decision became known our representative called attention to the fact that considerable British interests were involved—interests which had grown up under the shelter of previous decrees. I do not know whether it was owing to this representation, but it was in fact, decided that the new decree should not come into operation until this year. In the meantime our representations were renewed; but I am sorry to say, in this case also, we received a distinct intimation that, in the opinion of the Spanish Government, it is expected, for the protection of their mercantile marine and in accordance with the rules of the Spanish Customs reserving coastal trade for the national flag, that foreign shipping should not be admitted to the trade of these islands. There the matter remains, and I do not, as at present advised, see what means His Majesty's Government have of inducing the Spanish Government to take a different view.

In regard to the Marshall Islands, I made a statement in your Lordships' House the other evening, and I do not know that it is necessary for me to add to what I then said. I was able to tell the House that the German Government freely recognised that the Convention of 1896 entitled British and German shipping to absolute equality of treatment in that part of the ocean, and I was able to say that the particular concession granted to the Jaluit Company was about to be cancelled by the German Government. I do not think I need add anything to that.

I now pass to the last case mentioned by the noble Lord—the case of the wharves at Hankau. The story, stated briefly, is this. In the British concession at Hankau there is a small amount of wharfage which was reserved by this country—I believe the length of it is only sufficient to accommodate four hulks at one and the same time. There has been a considerable amount of dispute with regard to the conditions under which this wharfage was to be used. The old regulations were, I am bound to say, of a very unsatisfactory character. A meeting of the persons renting land in the concession used to be held, a good many of whom were not British subjects; they were able to recommend any applicant for the privilege of making use of this wharfage, and if their recommendation seemed to our Consul-General an improper one he was able to put a veto upon it; but if he did so the result was to prevent the particular candidate recommended by the land-renters from getting his wharf; but it did not enable the Consul-General to give it to anybody else. Therefore the result used to be a deadlock and the wharfage might remain vacant and useless. New regulations have been drafted by our Minister under which the British Consul-General will be in a position to notify to the municipal council his approval of any particular application for wharfage, and that approval will be obligatory upon the council. As an alternative mode of procedure, it is provided that the land-renters may also recommend an applicant, but there is an appeal to the Consul-General, whose decision is final, and instructions have been given which is to make it perfectly clear that a preference be given. The noble Lord seemed to be apprehensive that these new rules would be eluded by bogus registrations, under the shelter of which people who were not really British subjects would appear in the guise of British subjects and claim rights accordingly. That point, I think has been sufficiently provided for in the instructions, because it has been laid down that the Consul-General is to give a preference to British steamers and that, in deciding between one applicant and another, he is to have regard to the ownership and agency of the line and to decide which applicant most truly represents British interests. I do not think, therefore, that there is any prospect of the new regulations being evaded. In regard to the un-satisfactoriness of the state of things under which we do not at present obtain on the coasts of other countries the privileges which we afford to others, I am afraid that I am unable to give the noble Lord much comfort. But I can assure him that in all these cases, and particularly as regards Hankau, we have done all that is possible to secure due regard to British interests.