AGGRESSIVE GROWTH; 'COMBINE' AND UNFAIR ADVANTAGE.

courtesy: www.samemory.sa.gov.au/site/page.cfm?u=728

Aggressive growth

(late 1800's)

These additional ships could be deployed into the Western Australian trade, or anywhere else: Adelaide Steamship Company had plenty of options. They now bought out Anderson & Marshall and secured a foothold in Western Australia with two additional steamers and three coal hulks, and a ketch tender and company moorings in two ports. The ASC's services now ranged from Melbourne around the southern coast to northern Western Australia.

There was still opposition from other shipowners and overseas lines, and Adelaide Steamship Company also pursued the Darwin mail contract, which they considered theirs by right. The South Australian Post Office disagreed.

Expansion in Western Australia meant that the ASC's resources were stretched - there were never enough ships to blanket the competition, which seemed to be the important thing. Much juggling of ships occurred. A price war with the ketch trade, which Adelaide Steamship Company had no chance of winning was narrowly averted. A new company, Yorke's Peninsula Steamship Company, undercut them in the Gulf trade, and John Darling tried to seize a portion of the Gulf trade as well. Despite local squabbles the Western Australian trade developed with the discovery of gold - first in the Northern Territory, then the Kimberley, Pilbara and finally the Coolgardie-Kalgoorlie fields. Initially Adelaide Steamship Company was the only company operating to these fields, but such a monopoly could not and did not continue. However there was plenty of trade for all, including for the overseas lines, and by the end of 1899 territorial rights and the regulation of freight rates and passenger fares would be hammered out by the shipping industry.

The Advertiser (Adelaide) Friday 15 September, 1904.

THE SHIPPING COMBINE.

SHIPOWNERS' INTENTIONS.

NO REDUCTION OF WAGES.

Melbourne, December 29.

No attempt is made by the shipowners

engaged in the inter-State coastal trade to

deny that a mutual agreement or "combine,"' 

as it is called, has been established

with a view to working the shipping business 

within their control upon more advantageous 

terms to themselves than was possible under 

a system of cut-throat competition. They 

declare their reluctance to enter on a war of 

words with the officials of the Seamen's Union 

in regard to the consequences which may follow 

their actions in making new arrangements for the

conduct of their business. Nevertheless

the chairman of the Steamship Owners' 

Association (Mr. E. Northcote), the general

manager of the Adelaide Steamship Company, 

spoke with freedom to-day in reply

to the statements made by Mr. Henry Beltrage 

(the secretary of the Seamen's Union).

"What we are doing,'' explained Mr.

Northcote, '"is simply to reorganise the

shipping business in the same manner as

the Railways Commissioners might rearrange 

the railway business if it were found that the 

department was not on a satisfactory footing. 

The necessity of doing something of the kind 

has been forced upon us by circumstances. 

There has been a large introduction of new 

tonnage by various shipping companies of 

recent years, and the trade has not increased

sufficiently to justify the retention of both

old steamers and new. The latest Vessels

being larger and more convenient and up

to-date generally, are naturally in favor

with passengers, and as regards cargo some

of them carry more than twice the tonnage

taken by the older boats. It is an undoubted 

fact, as every one connected with shipping knows, 

that owing to the steamers of different companies 

competing with and overlapping one another, 

many of them have run short of freight, and it 

is hoped under the new system that with full 

cargoes matters will be more satisfactory not

only for the shipping companies, but also

for the general public. What we are doing is 

to give the travelling public the benefit of the 

new boats whilst we are withdrawing some 

of the old ones.

When asked what number of boats it

was proposed to lay up, Mr. Northcote

said that question had not been decided

up to the present. It would be a matter

of evolution. A great deal would depend

upon the course of trade. If freights

should fall off vessels would have to come

off too. "It is quite correct, as asserted

by Mr. Belfrage," he continued, "that four

steamers are being taken off the Queensland 

service, but there is generally a reduction in 

that quarter during the first half of the year. 

Business with the northern ports is not brisk until 

later on, when meat, hides, bones, and tallow come down.

There may be a couple more steamers suspended 

in connection with the western trade. The number 

of dispatches of steamers from Melbourne to the 

West will not, however, be decreased. There will be

two boats sent away each week, but the

sailing of the second one may be a little

irregular. The time-tables show that

these steamers used to run from Fremantle

to Sydney, and take a month on the voyage. 

Under the new arrangements they

will proceed as far as Melbourne only, and

the time occupied will be three weeks. I

am speaking now as regards passenger 

steamers. but it is also possible that;some of

the cargo boats may cease running. If

freights offer they will remain on. I can

assure you that the shipping companies will

be delighted to run all the boats they can

both for their own sake and for the sake

of their employees."

When asked whether the number of men

estimated by Mr. Belfrage, viz., 250, would

be thrown out of employment, Mr.

Northcote said that that number might be some

where about the mark. At the same time

he pointed out that the larger boats which

had recently been added to some of the

fleets employed invariably more stokers,

seamen, and stewards than the older 

vessels used to. Regarding the 

prospects of any of the surplus steamers finding 

employment in the trade with the islands,

that was hardly likely to happen at present. 

The cross-chartering of vessels between 

different companies would not affect seamen 

or passengers in any way.

The company by whom the men, were 

engaged would continue to be responsible for

their wages. "No doubt," added Mr.

Northcote, "the public are a little puzzled

at the fact that a boat belonging to one

company should be run by another, but

we were bound to make some such 

arrangement in order to equalise matters.

The time-tables had to be filled up, but

we could not go to one company and say,

'You must lay up all your boats.' What

we are doing is to try to divide the passengers 

and cargo in connection with the different 

ports as equally as we can amongst us. 

It has been a difficult matter to determine, 

but we have arranged the business upon as 

equitable a basis as possible.There is really 

nothing new in such a system. It is merely a 

question of chartering for the time being. 

Another company will charter our boats, and 

we shall charter theirs. The chartering of

one company's ships by some other company 

goes on all over the world."'

Mr. Northcote declined to discuss the

question of future developments. Everything 

he said, would depend on the condition of trade. 

As a matter of fact steamers would be put 

on or taken off automatically as circumstances 

warranted. "But you can say this," he added finally,

"that we have not the slightest idea of reducing 

wages."

Brisbane, December 29.

The arrangement by which the Adelaide

Steamship Company and the Howard Smith

Company run alternate weekly boats to

northern ports comes into operation in the

middle of January.

SOUTH AUSTRALIAN VIEWS.

NOT MUCH EFFECT ON PORT

ADELAIDE.

Some consternation was caused in Adelaide 

by the news that in consequence of

a combination of the steamship companies

engaged in the coastal trade several of the

steamers now employed were to be laid

up. 

From another source, however, a statement 

was obtained which throws further

light on the cause which has induced the

steamship companies to take the step of

reducing their service. In Melbourne the

steamship companies gave out as reason 

for this action that they wished to do away 

with what they describe as surplus tonnage. 

What they desire is to retain the trade, but 

to run their ships with full cargoes instead 

of their being partially empty. In other 

words they maintain that there has been 

an excess of tonnage over freight offering, 

and that the same trade can be dealt with 

by fewer vessels. 

Our informant pointed out that the combine 

referred to is no new creation, that it has 

been in existence for years.

When, however, the Adelaide Steamship

companies put on the western coastal 

service the new vessels Grantala and 

Yongala, and the A.U.S.N. Company brought

out the Kyarra and Kanowna, and the

Howard Smith line the Bombala, the bulk

of the passenger trade naturally drifted

to those steamers, and the lines having

boats less up to date were left lamenting.

It is suggested that in view of that fact

the smaller companies complained of

their loss of trade, and that the present

action is intended more equally to distribute 

the trade between the various companies. 

Under the agreement which has been entered 

into by the five inter-State shipping organisations 

the newer and larger vessels only will be utilised, 

and the elder ones may be diverted to other trade, 

although there may be some difficulty in 

finding employment for them elsewhere,

as they were specially built for the Australian 

coasting traffic. But as there is a large and 

increasing trade to the islands of the Pacific 

there is no doubt the Australian companies 

will make every effort to exploit it.

Another phase of the matter was mentioned 

by a shipping man. It was that the

reduction of the coastal service may to

some extent be due to the unfair competítion 

of some ocean steamers. The ocean

steamers pay lower wages, get their repairs

done in Europe at a cheaper rate, and also

obtain a large part of their stores in a

a cheaper market, so that they are able 

to "cut" the rates charged by the inter-State 

liners - and do so. A specific instance is 

mentioned of two trump steamers which 

brought cargoes from foreign ports to 

Port Adelaide, and then took freight for 

the coastal ports at cutting rates, thus 

coming into direct competition for the 

cargo trade of the Commonwealth.

No doubt Lund's Blue Anchor Line was referenced here!

With the local steamship owners, who are

compelled to pay higher wages to their

crews it is pointed out that if ocean

steamers were debarred from "cutting

rates" in the inter-State trade, and were

placed on the same footing as locally-owned

vessels, there would be abundant employment 

for the whole of the coastal steamers which are 

intended to be withdrawn from the service - 

Looking at the matter from an Australian point 

of view, it is certainly in the interests of the 

Commonwealth that the coasting trade should be in

the hands of an Australian mercantile marine. 

In the case of the coastal service the

profits earned are retained in the Common

-wealth, local labor is employed to man and

work the ships, repairs are effected locally,

and the whole of the stores and provisions

are bought within the Commonwealth.

While the wages paid to the seamen are, of

course, spent in Australia. Most, if not

the whole, of this money goes to England 

or Europe in the case of the ocean steamers.

A gentleman who has a thorough know-

ledge of the coastal shipping trade has 

supplied us with some details as to the 

proposed reduction of the service and 

the effect that it will have on South Australia.

"The chief alteration,"' he said, "will be in

regard to the northern trade from Melbourne 

to Queensland. Only two steamers

will be taken off the southern service.

Hitherto there have been nine boats running 

from Sydney to Fremantle. In future

they intend to run four steamers from 

Sydney and three from Melbourne - Adelaide-,

so far as the shipping community is concerned, 

will not suffer in any way from the change. 

The Sydney cargo will be brought

on by the boats coming from Sydney, and

consequently the boats from Melbourne will

have plenty of space available for Adelaide

cargo destined for Fremantle. One steamer 

will leave Port Adelaide every Saturday and 

another every Wednesday for the West. 

That will be two vessels a week exactly 

what we have been having in the

past.

In addition to those seven vessels owned by 

the five coastal-companies in the federation 

there will be the steamers of outside 

owners, such as the Melbourne Shipping 

Company, whose steamers will be dispatched 

at short intervals. It is the Sydney people who 

are left in the hole by this matter, as a boat 

which formerly left on Wednesday has been 

struck off the itinerary.

As far as the effect of these new arrangements 

on the employment of labor is concerned, 

I do not think there is much reason for agitation, 

because for many years past the steamers 

plying between Sydney and Fremantle have 

not drawn their crews from South Australia, 

but almost entirely from Melbourne or Sydney. 

There are at present on the inter-State boats 

very few men who have signed on in South 

Australia. The chief saving to the companies

 in this reduction scheme is in regard to the

Queensland trade."'

One Adelaide merchant suggested that the

effect of the reduction of the service between 

Sydney and Fremantle might result

in difficulty in securing space for cargo

from Adelaide to the West. It is stated

that this eventuality is not likely to occur- 

in fact that the new arrangement would 

tend to decrease that possibility, for the 

reason previously stated. In further support 

of this view it is mentioned that for a long 

time past there has been no lack of tonnage 

to the West.

The stage was set for Yongala's transfer of duties from the West Australia - Southern States run to the East Coast. The coastal shipping industry was evolving and adapting to that which would ensure survival and profit with no end of resentment for the 'ocean steamers' lines. The threat of the trans-Australian railway did not help confidence either, a sword of Damocles hanging over the West Australia - Southern States trade route. The coastal steamer trade was dominated by the Adelaide Steamship Company, Howard Smith Line and AUSN line (Australasian United Steam Navigation Company).

'Combine' has a certain 'ring' to it...