British Versus German Interests

In New Guinea

THE decision of the Norddeutscher Lloyd Company to run a new line of ships through New Guinea has stirred into much liveliness a situation that always has been attended by a certain amount of ferment—namely, German shipping activities in the Mandated Ter ritory of New Guinea. The matter now is receiving the attention of the Australian and Imperial Governments.

Three former German colonies in the Pacific are now held under the Mandate system —Australia has New Guinea, Japan has the Marshalls and Carolines, and New Zealand has Western Samoa.

The same authority—a “C” Class Man date—operates in each case; and the essential clause therein is Article 2: “The mandatory shall have full power of Administration and Legislation over the Territory, subject to the present Mandate, as an integral portion of (name of mandatory) and may apply the laws of (name of mandatory) to the

Territory, subject to such local modifica tions as circumstances may require . . . ”

The three mandatories named have placed each its own interpretation upon that clause. Japan has made the Marshalls and Carolines a close preserve for the settlement and trade of her own nationals—European ships, traders, and even casual travellers are sternly warned off. New Zealand has not closed the door into Samoa in the same manner; but no foreign ships trade coastwise in Samoa, and the Samoan tariff gives a very substantial preference to British goods.

In New Guinea, on the other hand, Australia has displayed an extraordinary generosity. At first, the terms of the Australian Navigation Act were imposed, giving a rigid preference to Australian ships; but this operated so harshly against the Territory’s interests that it was withdrawn, after lengthy inquiry, some ten years ago, and then Australia

went to the other extreme, and allowed the ships of all nations to enter the New Guinea transport trade.

The most notable effect of this lati tude was the development of the German shipping business. The little Bremer haven began to run between Hongkong and New Guinea ports, taking away copra and bringing back goods of Ger man, Japanese, and Chinese manufac ture. Australian trading interests did not like the development, but three separate influences supported the Ger mans —the Lutheran (German) mission stations, which export a good deal of copra; the large and growing Chinese trading community which brings in much merchandise from the East; and a section of the British population, which argued that the German ship was the

only protection they had against the

monopolistic power of Messrs. Burns Philp and Co. Ltd. and Messrs. W. R.

Carpenter and Co. Ltd. So the Bremer haven remained on this run, and pre sently it was joined by the Friderun; and now it is arranged that those two little steamers shall remain in the group as “feeders,” and that two 6000-tons motor vessels shall inaugurate a new N.D.L.

service between Australia and Hongkong, calling regularly at Salamaua and Rabaul.

The most extraordinary feature of this period of N.D.L. activity and develop ment is that Australia left the trading field wide open —there is a tariff, but it is only a revenue tariff, and gives no preference to British or Australian goods.

Australia, notoriously a country of high protection, allowed free trade in New Guinea!

Apart altogether from strategic con siderations, Australia’s interests in the Pacific Islands are substantial and valu able —that is recognised officially in the fact that the Commonwealth pays a large annual subsidy to Messrs. Burns Philp and Co. Ltd. for the maintenance of regular mail and passenger services. Aus tralia’s Islands trade would have suffered a severe set-back, as a result of the copra market disorganisation, had it not been for the discovery and development of the gold industry. The new goldfields have been proved and exploited largely as a result of Australian activity and enter prise. Furthermore, Australia has far more at stake in New Guinea than is represented by the investments of trading firms and shipping companies. The Com monwealth originally provided the finance necessary to enable large num bers of Australians to acquire and develop plantations in the Mandated Territory; and, when the depression came, and the planters were not able to keep up their repayments to the Com monwealth, the latter granted a mora torium, which is still in existence. The sum due by the planters to the Common wealth is about £2,500,000; and Austra lia at the moment is allowing the New Guinea planters to have the use of that sum, free of cost. As a matter of fact, it is very unlikely that the money ever will be repaid —there probably will be a revaluation and a writing-off. But that does not alter the fact that a large pro portion of the private planting industry in New Guinea was financed by Austra lian public funds. Similar considera tions may apply, perhaps, in connection with the two big Australian trading firms; they also financed planters liber ally in the good years, and have given them substantial concessions in the de pression period, and they also have very large sums at stake in the Territory.

In this connection, it is worth noting that New Guinea planters who are in debt to the big firms do not consider it politic to ship or trade with the German

line. That may be the inspiration of a suggestion, said to be now under con sideration, that the Australian mora torium should extend only to those plan ters who make use of British ships.

Why should Australia, in the circum stances described, permit other nations to come in and enjoy the trade which she herself has created and protected? There is much to be said in favor of free trade; but in the last two decades the whole world has gone crazy “economic nationalism,” as expressed in unsur mountable tariffs and indefensible sub sidies, has forced even that pillar of international trade freedom, Great Britain, to impose a protective tariff, and seriously to consider a policy of subsi dising the red ensign. By far the most embarrassing problem before the Com monwealth Parliament to-day is the need for finding markets for Australian pro ducts, so that Australia can meet her oversea debt commitments. Why should Australia, faced with an unbroken and virtually unbreakable barrier of “econ omic nationalism”, permit free trade in New Guinea?

The surprising thing is not that Aus tralia is now planning action to block the N.D.L. enterprise, but that for so long she has permitted that enterprise to continue. Her toleration apparently has been the result, partly of a quixotic interpretation of the Mandate, and partly of a fear on the part of the Ter ritory people that, if they become more definitely a part of the Commonwealth, they may have to submit to some of the Australian industrial laws which obvi ously would cause chaos in New Guinea.

The action that the Commonwealth Government is being urged to take is not directed necessarily against Germany.

As a matter of fact, one finds, even among those who most strongly urge the greater protection of Australian inter ests, a very real sympathy with the situ ation in which the Germans are placed.

They came late into the world as colon isers, but, by energy and genius, they ac quired valuable colonial territories; they lost those territories in the war which German militarism forced upon the world; they suffered the penalty, and now a re-born and vigorous Germany is eager to engage in international trade; Germany cannot buy foreign goods un less she sells her own goods and services, which include shipping; and her attempt to establish this new Hongkong-Aus tralian service has, from the international point of view, every economic justifica

tion. If the German nation is to be a factor in future world trade —and it must be —the German shipping and trading interests must dig in somewhere.

But, unhappily, this New Guinea shipping and trading difficulty is not merely a matter as between Britain (or Australia) and Germany; it is part of a world-wide problem, and must be treated as such. It would be sheer foolishness for Australia to grant privileges to the German shipping line, while the British Empire, as a whole, is fighting against a world of hostile tariffs and subsidies. If concessions are to be given to Germany, they should be part of an Imperial plan.

There is no real need for the German shipping services in New Guinea —the available British services are ample for all requirements. There is no doubt that the running of the new German motor vessels between Rabaul, Salamaua, and Australia will take away considerable trade from the British lines. Why, in view of all the circumstances, should that be permitted? New Guinea probably will mention the “monopoly of the big firms." If there is an oppressive monopoly in that direction, that surely is a domes tic matter for the consideration of Aus tralia; and should not be allowed to in terfere with the adjustment of the much larger and more important Imperial

problem.