A.—4

378

10th Day.'] Trade and Postal Communications and [16 June, 1911, Shipping Conferences. Sir D. DE VILLIERS GRAAFF— cont. Although it may be difficult to believe, it is nevertheless the case, that cargo may be offering at South African ports, and vessels of the Conference lines may be berthed in these same ports with plenty of available space, but these vessels aie prohibited from loading by virtue of the terms of the agreement between the various companies in the combine. Under an open freight maiket, of course, this could not happen and the shipper would derive full benefit fiom the lower rates quoted in order to fill this vacant accommodation. Then, again, we find the Conference lines controlling the agencies established at certain of our ports for loading and unloading vessels carrying our goods, and levying through their agencies charges that are much higher than the circumstances justify ; by these means a heavy additional burden is laid upon shippers. I have only touched upon a few of the disabilities under which we labour through the operations of the Conference lines, but they will afford a substantial indication of the considerations which have weighed with the Union Parliament in deciding to legislate against shipping combinations and against the granting of deferred rebates. We are convinced that the breaking down of this shipping monopoly will aid materially in the development of our country and, indeed, is essential to our prosperity. Nor do we admit that, in comparison with the advantages that the country will reap from an open freight market, the arguments in favour of a shipping Conference are possessed of any real force. Let us look at these arguments for a moment. It is contended that it is only by means of combinations that regular sailings are made possible ; that capital is assured of a sufficient return to justify the shipowners in investing in new vessels of higher type and capacity, and that stability of rates is secured to the advantage of the small importers. These arguments are specious and "plausible, but they will not stand examination. Fortunately the ring system is not universal and we have at hand a most striking instance of an open freight market proving the direct converse of the case put by the friends of the conferences. I refer to the case of the United States of America, where, in so far as concerns her export trade, absolute freedom of freight obtains. lam aware that the ring system of " deferred rebates " is in operation to a limited extent for the freights to the United States, but the wise and far-seeing legislation adopted by our American cousins, in what is known as the Sherman Anti-Trust Act, has effectually trimmed the claws of the shipowners in respect to the granting of " deferred rebates " on export shipments. The effect of this Act can be gauged from the fact that, so far as can be ascertained from the best informed quarters on that side of the Atlantic, the " deferred rebate " system has not been in use, at any rate in such centres of maritime activity as New York, at any time during the last eight years, and is not now used in the States publicly, if at all. This may come as a surprise to some of the members of the Conference, and it may not be without interest if I give a very brief account of how the result was achieved. Curiously enough we find our friends the Union Castle Company figuring prominently in the legal case which liberated the American shipper from the " deferred rebate " system. The United States law was in a somewhat uncertain state with regard to combinations for many years, but the precise question of the illegality of " deferred rebates " was decided in the case heard in the American courts of Thomson v. The Union Castle Company and others. In that case a shipper sued for treble damages under the Sherman Anti-Trust Act, alleging that the Conference of Shipowners who were operating the steamship service to South Africa under the deferred rebate system had injured the plaintiffs by restraining their trade, and also by forfeiting other rebates under the deferred rebate system, so as to place them at a disadvantage as compared with shippers who shipped exclusively by the Conference lines. The court held that the combination was illegal, and the jury found that the deferred rebates were, in substance, forfeit money exacted by the combination in excess of reasonable rates of freight. In the result the plaintiffs, who had not complied with the terms of the rebate circulars, and thus lost their rebates, recovered the full amount of the rebates lost as well as certain other minor damages, and this