379

A.—4,

16 June, 1911.] Trade and Postal Communications and [10th Day, CONFEBENCES* Sir D. de VILLIEES GRAAFF— cont. verdict under the statute was trebled by the court. The deferred rebate system had actually been abandoned by the Conference lines prior to the commencement of the action, on advice furnished by nearly all the leaders of the commercial bar. I think it will be readily admitted that a system which has been found by the American courts to be so contrary to public interests as to warrant such a severe penalty as I have indicated deserves at least to be viewed with grave suspicion by communities in other parts of the world to whom facilities for ocean transportation are essential to their very existence. Having explained this much in regard to what has happened in the United States, I should like to call attention to the results to that great country of the abolition of deferred rebates. If the contentions of the friends of the Conference lines are correct, the abolition of the deferred rebates in America should have been followed by irregular sailings and by hesitation on the part of shipowners to invest in new vessels, owing to the (alleged) absence of an assured return on the capital so invested ! As a matter of fact, the exact converse is the result; the competition induced by an open freight market has stimulated shipping operations to such an extent, by enabling shippers to enter new markets in consequence of reduced rates, that shipbuilding received an enormous impetus, and no signs of hesitation in the matter of acquiring the newest and best types of vessels were ever displayed by the shipowners. And this same healthy competition obliged American shipowners to maintain regular sailings or, in the alternative, to see their customers patronising more go-ahead lines. Not only were the regular sailings maintained, but services became more frequent, and the element of competition encouraged owners to cater more efficiently for the comfort, convenience, and safety of passengers, and for the needs of the commercial, industrial, and farming community. The other argument alluded to by me as having been urged in favour of shipping combines—viz., that they benefited the small shipper through the stability of freights—may be possessed of a certain amount of force, but I venture to point out that, in the fight for national existence and prosperity, it is the interest of the majority that must prevail, and it cannot for a moment be conceded that the wellbeing of a country should be subordinated to the interests of what, after all, must be a very small section of the community. As a matter of fact, Ido not for one moment admit that the interests of the small importer would suffer. In South Africa the railways and harbours are public property and the Government naturally fix the railage and harbour charges at such rates as may appear to them to be right and proper in the public interest. But so long as the absolute control of the seaborne traffic to South African ports is in the hands of an uncontrolled shipping combination, the Government's arrangements in regard to rail and port charges may at any time be nullified. This has been our experience in the past, and we are determined that, so far as lies in our power, it shall not continue. Close upon one hundred millions sterling is invested in the railways and harbours of the Union, and it is unreasonable to think that in matters relating to this enormous asset the will of the people of South Africa shall not prevail. But for the power wielded by the Conference lines, a power derived mainly from the operation of the deferred rebate system, such a state of affairs could not have been possible. In short, it has in effect rested with the Conference lines to determine how a large section of our fiscal dispositions should be made—to decide what additional burden of transportation charges should be borne by certain of our commercial highways and what measure of relief was good for the communities served by other of our main transport routes. Nor does South Africa stand alone among the British Dominions as an example of the unfortunate effects of shipping rings. Australia, I understand, appointed a Commission to investigate the subject of rebates, and that Commission recommended that rebates should be declared illegal. The result, I am informed, was the passing of the Australian Industries Act, 1907, containing provisions affecting the operations of shipowners making use of the rebate system. How far the provisions of that measure have operated towards limiting the powers of shipping rings in Australian waters I should be very much interested to