it was easy to build up, since his earnings were always the highest in the market and the taxation of his profits was comparatively small.

Although there is a very large amount of tonnage now in course of construction in the world, and the greater part of it is for foreign ownerships, British companies would seem to have no alternative but to build on a large scale, and as rapidly as possible. It has been shown above that the Mercantile Marine of the United Kingdom now consists of 16,345,000 tons gross, this figure including all steamers of 100 tons and upwards. Before the war some 12,000,000 tons were employed solely in trade with the United Kingdom. Considering that the total tonnage owned in the United Kingdom now amounts to less than 16,500,000 tons gross, and a proportion of this total consists of vessels unsuitable for ocean service, the margin left for all the other work which hitherto has been done by British shipping is very small indeed.

It is true that, as compared with the 12,000,000 tons employed in the United Kingdom trade before the war, there were at the beginning of 1917 only 7,500,000 tons, and at the end of 1918 only 6,250,000 tons so engaged. In the circumstances, imports of essential commodities were extremely well maintained, but the control established was not shipping management as it was understood before the war and as it should be again. Firstly, imports other than essential commodities were soon ruled out; secondly, the work of the Ministry of Shipping had necessarily to include the jettisoning of a large part of the results achieved by shipowners in gradually building up a world-wide shipping trade. The Ministry of Shipping had to divert tonnage from the long-distance routes to the short-distance routes. The problems of the supply of foodstuffs and raw material and their transport were closely connected. The departments responsible bought the supplies overseas, and did so on the understanding that the purchases must be made in the nearest markets. Thus, wheat was bought in North America, while enormous stocks were available in Australia but could not be imported because of the length of voyage. Everything possible that could be brought from North America was

brought, since the distance was short.

A main function

of the Ministry of Shipping was therefore to put every possible ton of shipping into the North Atlantic. This policy reached its climax in the spring and summer of 1918, when special efforts were necessary in order to transport the American army across the Atlantic. This policy was clearly sound war strategy, but it was not commerce. Britain could no longer carry for the world; she had more than she could do to carry for the Allied and Associated Nations. Similarly, the shipbuilding policy was to construct plain cargo steamers of standard types. This could be thoroughly justified Was also an emergency war measure, but it was not commercial shipbuilding. Very gradually conditions in both shipbuilding and shipping are reverting to a commercial basis; and it will be in competitive commercial conditions that British shipping will have to fight for its existence. The sooner the bonds of State control can be untied, the easier will it be for British shipping to expand.

The aftermath of the war policies is now being acutely felt. The British Dominions overseas have been starved of tonnage, and they continue to be starved. Yet the British Dominions are joined with the United Kingdom by shipping. Before the war, thanks to the enterprise of the shipping owners, sufficient tonnage was placed in the services to meet all the demands of communication between the old and the young nations. Now tonnage is lacking. It is well known that there are enormous numbers of persons wanting to proceed home to British Dominions overseas from this country who cannot obtain berths. There were, quite lately, 14,000 names of persons on the waiting list of the Union Castle Company alone who were wanting passages to South Africa. The present inadequacy of accommodation is in no possible way the fault of the company. Its ships, like those of all the other Mail and Passenger Lines, were requisitioned by the Government as mercantile cruisers, hospital ships, and transports; and rehabilitation, especially in these days of short working hours, takes time. Until the beginning of October practically the whole of the space was absorbed by Government for repatriation of troops. Now the situation has been relieved by the decision of

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the Government to allot not more than 25 per cent. of the accommodation for this purpose, leaving 75 per cent. free for the ordinary travelling public holding priority fro certificates. No doubt the certificate system was carefully be considered, but great hardship has been inflicted on private individuals, whether they were persons wishing to travel for domestic reasons or business men wanting the to go abroad to open up or develop trade relations. b When business men are denied opportunities of travel an actual loss to the nation is often incurred. The lack of passenger accommodation has affected every route, and the South African is merely cited as an example. In the Indian trade the shortcomings have also been very serious indeed. Many months must elapse before the companies can keep pace with the demand; and the loss of business opportunities to the nation is a grave matter.

In another direction, the tonnage difficulties during the war have led to a situation which is regarded in shipping circles with especially grave concern. This is the position which has been created by the ownership by the Commonwealth of Australia of a fleet of steamers. This development can be traced directly to the dissatisfaction of Mr W. M. Hughes, the Australian Premier, when ships were diverted to other routes during the war. A fleet of second-hand British steamers was acquired, ostensibly for the purpose of transporting the Australian wheat crop to Europe. This policy was not in accordance with that of the Imperial Government, by which the employment of every British ship was directed by a central authority. Clearly the wheat crop should have at once been acquired by the Imperial Government and held in reserve if ships could not be spared for its transport. However, Mr Hughes purchased the ships in the summer of 1916; and the Ministry of Shipping was not formed until a campaign in favour of central control had been long conducted in The Times.' By then the ships had been removed from the Register of the United Kingdom, and formed the nucleus of a Commonwealth Government Line. They have been reinforced by the fleet of German steamers seized in Australian ports. The earnings of these ships were not subject to the high taxation which was imposed in this country on the earnings of

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all industrial undertakings. The result is that, owing to the high freights which were earned and the freedom from taxation, the Commonwealth Government Line has been enabled to build up a strong financial position.

During his recent visit to this country, Mr Hughes placed contracts for five large steamers with builders in the United Kingdom, while other ships are known to be building in Australia. At the moment, perhaps, the placing of ships on the berth by the Commonwealth Government Line is not a matter which need cause owners sleepless nights. Admittedly, the second-hand ships acquired during the war were not the equal of the fine refrigerated ships which have been specially built by the shipping companies for the trade. But when the ships now to be built are placed in the service, a new factor will be introduced. New ships are being built for the companies-orders were placed as long ago as the spring of 1915-at prodigious cost; and the shipping managers admit that the competition of the Government Line, having behind it all the resources of Australia, will be difficult to meet, especially as it would be possible to keep the accounts in such a way that the real results could be concealed.

Many merchants, no less than shipping owners, regard this Commonwealth Government development with extremely grave concern. It is known that the Labour Party in Australia openly advocates the nationalisation of banking, insurance, shipping, coal, etc. Presumably the underlying idea is that the Government would arrange for financial facilities and provide for disposal and transport. Such a programme naturally arouses the utmost distrust among business men trading with Australia. Many merchants reason that, if they were to give encouragement to the Commonwealth Shipping Line, their own turn for being attacked would come. Feeling is very strong indeed on the subject of the acceptance of orders by British builders for a Government which has not lost a single vessel which it owned before the war, when the yards could be filled by British and allied companies whose fleets have been so seriously depleted by the war. It is suggested that representation should be made to the Shipping Controller and the Controller General of Merchant Shipbuilding on this point; and it

is certain that, if and when the Commonwealth Government comes to this country to finance its schemes, business men will want to know, before subscribing, for what purposes the money is to be used.

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Although the outlook is obscured in the Australian trade, the policy now required of British shipowners would seem to be one of enterprising development. A large amount of tonnage will be required for the direct trade with the United Kingdom, as well as for the trades between British Dominions overseas and other nations. Happily, the British Commonwealth of Nations includes some young countries which are yet little developed; and it may be in the opening up of services between these growing countries and the more densely populated lands that the genius of British shipping managers find most scope. Unless British owners build fast, other owners will no doubt make full use of their opportunities. The United States are showing many signs of enterprise in construction, in opening up new services, and in collect ing information respecting the work of British companies having offices in the United States. The spirit of pride in the possession of a great mercantile marine is being encouraged there. The workers in the shipyards are kept informed of the movements of the ships which they have built, and the merchants are being urged to ship in American vessels. The same spirit needs to be encouraged here, for such interest in and pride of work leads to good work. The right of the United States to the possession of a substantial mercantile marine is of course recognised by leading British shipping men, who consider that the policy of the two countries should be one of co-operation. The German mercantile marine, which before the war was in some trades the most formidable competitor, is not at present a factor.

Unquestionably, the United States are attacking the problem of developing a big mercantile marine with enthusiasm and vigour. How serious the nation is, was shown by the successful prosecution of their claim for the eighty-nine German liners which sought shelter in the United States at the outbreak of war in order to escape capture by Allied vessels. This claim is admittedly a delicate one, and it is remarkable that no frank statement has ever been made on the subject by