rates from Durban to east African ports, Beira to Mombasa, inclusive; the new rates to be applicable from all Union ports without differential. In the case of motorcars the board also concurred in the proposal that a 50-percent reduction should be made in the ocean freight rates as then charged on motorcars shipped by Italian steamers from Port Elizabeth to Mombasa and Dar-esSalaam, and asked to be furnished, after operation of the new freight rates for 6 months, with particulars of the practical result of the reductions." Freight dumping duties protect South African industries.-The board has directed attention to the necessity for amended legislation in the Union in connection with the imposition of freight dumping duties, pointing out that under the existing customs machinery the levying of such duties became ineffective in the event of the regular Lines reducing their freight rates to the level of those of their spasmodic competitors, seeing that under the law then existing the freight dumping duty which might be imposed was not permitted to exceed the amount of the difference between the competing or reduced rate, and the prevailing rate of freight, and that any rate reduced by the regular Lines automatically became the prevailing rate. During the year new legislation dealing with this matter was enacted, subsections 15 (1) (c) and 15 (2) (c) of the Customs Tariff and Excise Duties Amendment Act (Act No. 36 of 1925, as amended) which dealt with freight dumping, being deleted and the following new subsections substituted therefor: "Whenever after investigation and report by the Board of Trade and Industries the Minister is satisfied-(a) that goods which are of a class or kind produced or manufactured in the Union have been or are being or are likely to be exported to the Union from a particular country or port of shipment at a rate of freight or at freight charges less than the rate of freight certified by the South African Shipping Board as being the normal freight rate chargeable on that class or kind of goods from that country or port; (b) that such reduction is exceptional in character; (c) that detriment to an industry within the Union may result from such reduction; and (d) that it would be in the public interest to impose a freight dumping duty in respect of such goods— he may from time to time determine the minimum rate of freight which shall be applicable to goods of that class or kind shipped from that country or port to any of the several ports of discharge in the Union or to any of the several ports in Africa at which goods are discharged for removal overland to the Union; and he shall thereupon notify the same in the Gazette; provided that the minimum rate so determined and notified shall in no case exceed the normal freight rate as certified in terms of paragraph (a). If, after the issue of such notification, any person imports into the Union any goods of a class or kind to which in terms thereof any such minimum rate is applicable, there shall, if such goods have been shipped from any such country or port to any such port of discharge at a rate of freight or freight charges less than the minimum rate so determined and notified in respect of goods of that class or kind shipped from that country or port to that port of discharge, be charged, levied, collected and paid on such goods on their importation into the Union, in addition to the duties otherwise prescribed, a freight dumping duty equal to the difference between the rate of freight or freight charges actually paid and the minimum rate of freight so determined and notified." Arising out of the legislation referred to, requests have been received by this board during the year from the Board of Trade and Industries in terms of new subsection (a), quoted above, for certification as to the normal freight rate chargeable on certain articles from various countries of shipment. During the year rates on the following commodities have been certified by the board as normal: Superphosphates from Holland and Belgium; iron and steel goods from Belgium, Luxemburg, Germany, and France; motor cars from United States of America.10 Board seeks wider powers. In its report for the year ended May 31, 1936, the board indicated its intention of putting forward certain amendments to the act with the view of widening, always in an advisory capacity, its sphere of action, including powers to call for any information required by it for the purpose of carrying out its functions. After much deliberation the board submitted to the Government its proposals for amending the act under which it functions, but was informed that Annual Report, 1936. 10 Annual Report, 1937. owing to the necessity of passing other urgent legislation, the Government could not see its way to introduce the legislation recommended by the board during the 1937 session. The amendments proposed by the board, which it still considers should be placed before Parliament at the earliest possible date, provide principally for a number of the powers at present exercised by the board under its regulations to be incorporated in the new act, this being regarded as a more satisfactory arrangement. Another suggestion of the board in this connection is that provision should be made in the new act that any agreement, contract, or arrangement which the Government may have under consideration with any shipping company or combination of shipping companies in respect of ocean transport of goods, passengers, or mails, shall be referred to the board for report." GOVERNMENT CONTRACTS WITH SHIPPING COMPANIES Two of these contracts have been negotiated by the Government. The first and most important is the agreement with the Union Castle Mail Steamship Company, to which the Perishable Products Export Control Board also is a party; the second is the agreement with the Navigazione Libera Triestino and the "Italia" Navigation Company. UNION-CASTLE MAIL STEAMSHIP CO. A summary of the present contract with the Union-Castle Mail Steamship Co. appears in the annual report of the South African Shipping Board for the year ended May 31, 1934, viz: The ocean freight agreement between the Union Government and the Perishable Products Export Control Board of the one part, and the Union-Castle Mail Steamship Co., Ltd., of the other part, was first entered into in its present form as from January 1, 1929, provision being included therein for its amendment or termination at the end of 5 years from the date of its commencement, upon 12 months' prior notice being given to that effect. The agreement deals with the conveyance of cargo from South Africa to European berth ports of the South African Conference Lines, and vice versa. It regulates the transport of Government cargo, fixes maximum rates of freight for the conveyance of perishables and other South African products to Europe, fixes maximum rates of freight for the conveyance of cargo in the opposite direction, and imposes upon the contractors the obligation of providing weekly approved refrigerated space for perishables up to a certain fixed tonnage. As indicated in the annual report of the board for 1933, notice was given by the Government to the Union-Castle Mail Steamship Co., Ltd., of the desire of the Government and the Perishable Products Export Control Board to amend the agreement in certain particulars, and negotiations in this connection duly took place between the parties concerned, resulting in a new agreement being entered into, operative for a period of 10 years from January 1, 1934, with provisions for amendment or termination at the end of 5 years, if desired, by either the Government or the contractors. At the negotiations between the parties concerned, the Shipping Board, in its advisory capacity to the Union Government, was represented by the chairman and the secretary. Amongst the principal alterations in the new agreement are: 1. An increase in the maximum weekly refrigerated space for perishables to be provided by the contractors during the deciduous fruit season, from 5,000 tons under the old agreement to 6,800 tons of 55 cubic feet during the first year of the new agreement, increasing gradually to 9,000 tons of 55 cubic feet in the fifth year of the agreement. 2. An increase in the maximum weekly refrigerated space for perishables to be provided by the contractors during the citrus fruit season, from 7,000 tons under the old agreement to 10,200 tons of 55 cubic feet during the first year of the new agreement, increasing gradually to 14,400 tons of 55 cubic feet in the fifth year of the agreement. 11 Annual Report, 1937. 3. A reduction in the maximum rates of freight which may be charged by the contractors on specified South African products. "ITALIA" AND NAVIGAZIONE LIBERA TRIESTINO In 1933 the Government concluded an agreement with the Navigazione Libera Triestino and the "Italia" Navigation Co., for a period of 5 years, providing a subsidy of £150,000 per year. The lines undertook to maintain certain services to Mediterranean ports and to East and West African ports. Rates to Mediterranean ports were not to exceed those charged between South African and other European ports, whereas rates on South African produce to East and West African ports were to be fixed by the Minister of Commerce and Industries. On January 1, 1937, the Lloyd Triestino Navigation Co. of Trieste took over the rights and obligations of the two contracting lines. It was hoped that in the 5 years of the contract that the lines could establish themselves on an economic basis and that Union exporters would be able to develop a profitable business. It has been reported, however, that the Government does not contemplate renewal of the contract. ACT OF 1911 PRECLUDES REBATES The Post Office Administration and Shipping Combinations Discouragement Act of 1911 deals with rebates whether deferred or not. It provides as follows: 6. (a) The Governor-General may enter into contracts in writing with any persons for the conveyance by sea of postal articles to and from the Union beyond the limits of South Africa. (b) The Governor-General shall not enter into any such ocean mail contract with any person who-(i) is connected directly or indirectly with any such shipping or other combination as the Governor-General may deem detrimental to, or likely to affect adversely, South African trade or industries; or (ii) gives, offers, or promises to any person, any rebate, refund, discount, or reward upon condition that such person shall ship, or in consideration of such person having shipped, goods by vessels of particular lines to the exclusion of any others. TRAMP RATES As a rule tramps are chartered overseas, in the open market. The Union Government does not exercise any authority over these rates. AUSTRALIA LINER RATES-PRIVATE CONTROL Three forms of control are in effect in Australia. Rates in the Far East trade are fixed by conferences of conventional design. In the European trade, however, rates are established by the Australian Oversea Transport Association, which includes producers, exporters, and importers, as well as shipowners. Still another variation occurs in the American trade, where the lines have no formal organization or agreement, but merely adhere to uniform rates to avoid the consequences of rate competition. The conferences do not publish their agreements or their tariffs, but the Australian Oversea Transport Association releases accounts of its activities from time to time, including agreements with respect to rates. These rates, moreover, are referred to in the various reports of the statutory boards that participate in the association. A description of these boards appears elsewhere in this section. Shipper organization has been developed to an unprecedented extent in Australia. Group representation is quite general in rate negotiations with lines and conferences. Regular or exclusive patronage is secured by fines, contracts, and rebates, but these are subject to restrictions imposed by the Industries Preservation Act, cited later in this section. Fines apply to shippers who are members of the A. O. T. A. There is a provision in article 7 of the association's agreement that shippers who fail to confine their exports to vessels of member lines shall be subject to assessment as "liquidated damages" a sum equal to 10 percent of the freight paid by such shippers to all lines parties to the agreement during the 12 months preceding the breach thereof or from the date of the agreement, whichever period is shorter. In the case of wool in trades outside the scope of the A. O. T. A., the lines, so far as can be ascertained, charge 5 percent primage less a rebate of 10 percent immediately after shipment. Shippers that are members of the A. O. T. A. receive a rebate of 1 shilling 9 pence per bale on greasy wool and 1 shilling 6 pence per bale on scoured wool, at the end of the season (July). A typical form of agreement as between shippers and shipping companies members of the A. O. T. A. is reproduced at the end of this section. AUSTRALIAN OVERSEA TRANSPORT ASSOCIATION This association is exceptional in its scope, being in the nature of a superconference, including in a single formal organization both shipper and shipowner representatives. The A. O. T. A., as it is called for brevity, is composed of the following: A committee_of producers, importers, and exporters in each State, called the Exporters' Oversea Transport Committee (E. O. T. C.), and a committee of oversea shipowners in each State, called the Shipowners' Oversea Transport Committee (S. O. T. C.); a joint committee of the above in each State (State Joint Transport Committee); an executive in Sydney and a council drawn from the whole of Australia. REPORT OF SPECIAL CONFERENCE IN 1929 The report of the Conference on Oversea Shipping, held in 1929, states that 1. For the development of the commerce of Australia, and the carriage of her produce, an efficient and speedy service of suitable steamers is necessary at stable rates. 2. It has been demonstrated to the satisfaction of the conference that cargo lines in the trade are suffering heavy losses. 3. The conference agrees that if further increases in the rates of freight to and from Australia are to be avoided or reductions made possible, it is necessary to secure economies in the most efficient use of steamers, prompt reductions in dues, charges, taxes, etc., to which end the conference, amongst other things, recommends the agreement system as between shipper and shipowner, and the removal of any legislative bar thereto. The report of the conference was unanimous and the A. O. T. A. was the outcome, being constituted to carry out the decision of the conference. EVENTS LEADING TO FORMATION OF A. O. T. A. As in the case of many other cooperative organizations, the A. O. T. A. traces its inception to the pressure of acute economic depression. Formation of the A. O. T. A. was decided upon after a conference in June 1929. This conference was convened by S. M. Bruce, then Prime Minister of the Commonwealth of Australia. It was the outcome of representations which had been made to shiponwers in the United Kingdom following an announcement that freights to and from Australia were to be raised immediately, the former by 7 percent. Australia at that time was feeling the first effects of the depression, and the Prime Minister expressed the desire that every effort should be made to avoid freight increases. It was at the request of Mr. Bruce that a delegation of British shipowners, headed by Sir Alan Anderson, came from the United Kingdom, bringing with them audited figures which showed that during the 3 years, 1926-29, six representative British lines had lost £2,900,000 without providing for interest on capital. The conference included representatives of shipowners and the following interests: Wool, dairy produce, wheat, processed fruit, fresh fruit, lamb and mutton, beef, as well as western Australia exporters and importers. PARTIES CONSULTED IN FORMING A. O. T. A. The Minister for Markets, following the Conference on Oversea Shipping, communicated with the following organizations, requesting them to send delegates to a meeting, which was held on June 25 and 26, 1929: Chambers of commerce-The president of the Chamber of Commerce in the capital city of each State. Dried fruits-The Dried Fruits Control Board, Melbourne. Dairy produce-The Dairy Produce Export Control Board, Melbourne. Metals The Metal Freights Committee, Melbourne. (This body is representative of the principal metal producing and exporting interests in Australia.) Sugar The Australian Sugar Producers' Association, Brisbane; The Queensland Cane Growers' Association, Brisbane. Meat-The N. S. W. Meat Exporters' Association, Sydney; The Victorian Meat Exporters' Association, Melbourne; The Queensland Meat Export Companies' Committee, Brisbane; The Stockowners' Association of South Australia. Adelaide, S. A.; The Pastoralists' Association of West Australia, Perth, W. A. Wheat-Queensland: The State Wheat Board, Brisbane; N. S. W.: The Farmers and Graziers' Cooperative Grain, Insurance and Agency, Ltd.; |