Business and Development

Move To Restore Confidence

In Tongan Produce Bodies

From a Nukualofa correspondent

Recommendations recently submitted to Tonga’s Produce Board, seem likely to lead to great improvements in their operation and effectiveness. The recommendations were made by PA Manage ment Consultants, appointed to investigate the operations of the Tonga Produce Board, Tonga Copra Board and Tonga Construction Company, with a view to improving their general effectiveness. The appointment arose out of a request by the Tonga Government to the UK and the services of the firm are being largely financed from Britain’s technical assistance programme.

Main feature of the proposals is the appointment of a Director of Commodity Boards who will be res ponsible both for seeking markets for the kingdom’s agricultural pro duce and for improving liaison be tween the boards of the Department of Agriculture. It’s planned to restore growers’ confidence in the Produce Board mainly by a policy of higher prices, a long-term pricing policy and the introduction of a minimum guaranteed price. Produce Board cash reserves may be used to further develop the Department or Agri culture’s extension service.

Reports are expected from the management consultants in late September and in October to cover the operations of the Tonga Copra Board and Tonga Construction Company. It may well be that the proposals to be made in these fields will be more far-reaching than those made for the Produce Board. With out doubt a much more effective system of cash, credit and stock con trol will be a major feature of the proposals.

In recent years the operations of Tonga’s Commodity Boards have given rise to increasing disquiet among growers. A loss of the growers’ confidence probably partly explains the continued fall in banana produc tion since 1968. Matters were brought to a head in 1969 by the appoint ment of an expatriate government auditor, Mr. D. Meister, who has pointed to embarrassingly large de falcations in the two commodity boards’ activities.

The auditor’s reports led to an in vestigation of the Tonga Copra Board cafeteria in late 1969, to the setting up only a few weeks later of a select committee to investigate the activities of the commodity boards, and finally to the suspension of the Tonga Copra Board’s district manager for Vavau in January.

As a result of the disclosures of the government auditor, and after considerable pressure from the grow ers and the Agricultural Council, the Copra Board manager, Mr. S.

H. Brown, tendered his resignation

in March. Mr. Brown had joined the Copra Board in 1944 and was made manager in 1954. His tenure as manager saw the board’s activities diversify very considerably into such fields as desiccated coconut produc tion, coir products, shipping interests, the formation of the Tonga Con struction Company and the board’s involvement in the abortive Pago Pago desiccated coconut venture.

Although Mr. Brown’s resignation was not unexpected, it was generally felt that he had been made the scape goat for the weak management which the government and the Agricultural Council had exerted over the board.

It seems that the appointment of P.A. Management Consultants, and the issue of their first set of pro posals, is the beginning of a promis ing improvement in the field of agricultural production and export.

It may well lead to a new phase of development in the kingdom’s ecom omy built upon the sound foundations of agriculture.

TNT interested in

Union Steam Ship

The Union Steam Ship Company of New Zealand Ltd., oldest com mercial shipping company in the Pacific area, could change hands. In September, talks were under way between the Union Company and Thomas Nationwide Transport Ltd., concerning the change of ownership of Union ordinary shares. These have been held by the P& O Group of London for more than 50 years.

Soon after TNT’s interest was revealed there was a move to make a competitive bid in New Zealand.

There was strong NZ opinion that the USS Co. should remain under NZ control.

Chairman of R. A. Owens Holdings Ltd., Mr. Robert Owens, said New Zealand Sea Transport Ltd. would go public and make a bid for the

Uss.

Thomas Nationwide Transport is one of the largest transport groups in NZ and the largest in Australia.

Last month TNT acquired a one third interest in Bulkships Ltd. and through this an interest in Associated Steamships Ltd., a container shipping group operating Australian waters.

Already a substantial customer of Union SS, TNT is after a holding large enough to integrate its freight

forwarding services in Australia and NZ.

At present the USS Co. operates a passenger-cargo service between NZ and Fiji. Samoa and Tonga; roll on-roll off services from NZ to Aus tralia; passenger and cargo services around NZ; regular conventional cargo services from NZ to Australia and a passenger-cargo service from NZ to India, Pakistan, Malaysia and Singapore. The fleet is the largest, in numbers, in the Southern Hemisphere.

The Union Steam Ship Company was incorporated in 1875 but its roots extend back to the time of the early Otago settlers and the gold rushes that began in the 1860’s.

Even after P& O acquired all its ordinary shares in 1917 it continued to be regarded as New Zealand’s own shipping line; and within 10 years of its formation it was opera ting trans-Tasman and into the Pacific Islands.

The USS Co. ships were part of the scene in Fiji, Western Samoa, Tahiti, Tonga and the Cooks for generations and still are, of course, if now to a more limited degree.

The change began after World War II when the last of the trans pacific passenger services ended, when the USS Co.’s Grand Pacific Hotel in Suva was disposed of, and when air companies took over a lot of the functions formerly performed by shipping.

The father of the Union Co. was John Jones who set up a whaling station a few miles north of Otago Harbour in 1838 and, after the first settlers arrived in Otago from Scotland in 1848, started up in busi ness in Dunedin as a general merchant.

As part of his activities he acquired a major interest in the small steamers which operated, as the Harbour Steam Company, between Port Chalmers and Dunedin.

Almost at the same time, gold was discovered in the Otago Province and adventurers rushed there from Australia and elsewhere in everything that would float. Otago Harbour became the busiest port in New Zealand and the Harbour Steam Co. prospered and expanded accordingly.

When Jones died in 1869 his interests were bought by James Mills who had been his manager, and Mills, in association with John Darling, who later became the first superintending engineer of the USS Co., formed a new proprietary company which kept the name of Harbour Steam Co.

The partners were soon looking

further afield than Otago Harbour, or even New Zealand. They bought ships and they had others built for them on the Clyde, beginning a long association with William Denny and Brothers of Dumbarton, who in the next 30 years built 30 passenger ships for them.

By 1875 Mills and Darling were interested in five shipping proprietary companies and at this stage they decided to amalgamate them all as the Union Steam Ship Company. The company was incorporated on July 12, 1875, with nominal capital of £250,000, divided into £lO shares.

By the beginning of World War I the USS Co. operated 75 vessels of a total tonnage of 232,147. The company’s ships dominated the NZ coastal trade, much of the Pacific and Tasman trade and had services to the United Kingdom and India.

After the P& O Company came into the picture, passenger services were greatly increased. Their vessels Aorangi, Niagara, Monowai and Tahiti became almost household words; and the trans-Tasman liner Awatea was considered the latest word in luxury when she was brought into service in September, 1936. (During World War II Awatea was converted to a Landing Ship, Infantry, and took part in Allied landings in Algeria and North Africa but was bombed, set on fire by German aircraft, in November, 1942, and sank off Cape Carbon, NW Africa).

The Union Co. became interested in commercial aviation in the 1930’5, with the wholly owned subsidiary.

Union Airways of New Zealand, and interests in other smaller companies.

From 1935 USS Co. took a leading part in the establishment of Tasman Empire Airways Ltd. TEAL’s found ing members were Union Airways, BOAC and Qantas and the service was inaugurated, with Empire flying boats, between Sydney and Auckland in 1940.

Management and operation were in the hands of the Union Steam Ship Co. through its Union Airways subsidiary until 1945 when the NZ Government took over Union’s shares.

Although the Union Company has come in for its normal share of criticism (NZ exporters have been complaining recently about build-up of cargo for Islands ports— PlM, Aug., p. 97), no one wants to see Union disappear from the Pacific. • Western Samoa’s first Rotary club was formed at a meeting held in Apia in September. The president is Mr. Peter Paul, vice-president Mr.

Barry Spring, treasurer Mr. W.

Lancaster, secretary Mr. Lloyd Smith.

P-NG wants an

investment carp.

A plan by the Papua-New Guinea Administration to establish a major investment corporation to buy shares in foreign firms on behalf of New Guineans was described in late Sep tember by one Sydney financial expert as “half baked” and “not thought through”.

A bill to set up the corporation was introduced in the P-NG House of Assembly on September 25 but debate was held over to the next sitting in November.

Initially, the corporation will be

financed by grants from the Aus tralian and P-NG governments. It is understood that it will not buy shares on the open market, except in com panies registered in the territory. It will be concerned primarily with newly-set up companies which aim to exploit the natural resources of P-NG. (The Administration already has large shareholdings in the Bougainville copper project and the oil-palm industry in New Britain, which are administered by the Development Bank).

The corporation will aim to acquire 20 to 30 per cent, of shares in any company in which it invests so that, say its architects, it can have its own

director on such a company’s board.

The corporation, in its turn, will be prepared at some time unspecified, to sell shares to individual New Guineans or organisations run by them.

The question so far unanswered is what happens to the position of the corporation’s nominee on a specific board when the bulk share holding in that company is dissipated to individuals.

A further departure from normal business practice is that something will be written into the ordinance to prevent native shareholders from selling to non-natives.

As the purpose of the whole exercise is to give the territory an equity in certain companies now that “foreign-ownership” is almost as politically explosive as “colonialism”, it might be far simpler all round for the corporation to hold shares in trust in perpetuity, administering them for the good of the government of the day through the board which is provided for in the proposed legislation.

This board will have a managing director, one director from the Administration, one from the P-NG Development Bank and not more than nine others of whom four, at least, must be natives.

Samoa newspaper

moves Great interest has been shown in both Apia and Pago with the an nouncement that Guam Publications has entered into an option to buy a majority control of The Samoa Times, the leading newspaper serving both Western and American Samoa.

Guam Publications is a subsidiary of the daily Honolulu Star-Bulletin.

The option announcement comes not long after some important changes in the editorial control of The Samoa Times.

Disagreements over The Samoa Times’ policies relating to the opera tions of the newspaper’s Pago Pago office forced the recent resignation of The Samoa Times, Apia, managing editor, Mr. Peter Creevey.

Since its inception in its present form in June, 1967, The Samoa Times has had offices in Pago Pago and in Apia, both under managing editors. The Apia managing editor, Peter Creevey, was also secretary of the board of directors.

The main issue of disagreement between the two managing editors has been whether the Pago Pago office should publish a separate newspaper or whether both offices should continue to print and publish jointly under the Samoa Printing and

Publishing Co. in Apia, which is owned by one of the directors of The Samoa Times, Mr. Aitken Fruean.

Apparently the Pago Pago managing editor, Mr. lan Todd, preferred to have his own part of the paper printed in Pago Pago, at a saving in time and costs. Mr. Creevey probably felt that too much indepen dence by the Pago office would create a serious division between the two offices. And it certainly did.

With Mr. Creevey’s resignation, Mr. Todd has now become senior man in the company. A recent board meeting decided not to hire a managing editor for the Apia office,

which will come under the jurisdic tion of the Pago managing editor.

But Apia operations will be under the direct supervision of Mr. Pito Faalogo, originally hired a year ago as a Samoan editor.

The twice weekly issues of The Samoa Times meanwhile continue to be printed in Apia by Mr. Fruean: the Tuesday issue mainly for Pago Pago readers, the Friday issue mainly for Apia.

The Samoa Times was founded in Pago Pago in 1964 by an ex- Stars and Stripes newspaperman, Alan Reed, and the American Samoa trading company, B. F. Kneubuhl.

After Reed left in early 1966, a

succession of editors followed: Felise Va’a, Frank Pritchard and finally Peter Creevey, who had just completed a term with the Samoa Bulletin, in Apia.

In 1967 The Samoa Times, The Samoa Bulletin and Samoana (also of Apia) were merged under the name of The Samoa Times. The Apia Bulletin shareholders, Messrs.

Rudy Ott and Aitken Fruean, held a third of the new shares. Another third was held by Messrs. Kurt von Reiche and Ted Annandale, of Samoana, which went into liquidation.

The rest of the shares belonged to B. F. Kneubuhl in Pago Pago.

The Samoa Times is currently being sued for SUS6OO,OOO by another Pago Pago newspaper, The Samoa News, for alleged libel involving Mr.

Jake King, managing editor of The Samoa News. Presumably no action will be taken by the Honolulu option holders until this matter is settled.

King, a Stateside employee attached to American Samoa’s Education Department was ordered deported by the Immigration Board when his contract was completed.

King is still fighting this.

The Samoa News has been pub lished since August, 1969. It was founded by a group of Pago Pago businessmen who wanted to see a completely locally owned newspaper.

Shareholders include Apelu Galea’i, Eddie Meredith, Otto Haleck, Mr. and Mrs. L. V. Manuma, Peter Reid, Pila Patu, Mike Tagaloa Tuiolosega, Gus Annesley.

The present publisher is Otto Galea’i brother of Apelu Galea’i. The first two editors were Pat Galea’i and Felise Va’a. Felise resigned because he didn’t agree with the publishing policy and now edits The Pacific Star, in Apia.

The Pacific Star was founded in 1969, and is the Times’ only Apia competitor. Shareholders include members of Fuimaono Moasope’s family (Fuimaono Moasope is pre sently Minister of Health).

Japan buys most

from Caledonia

Japan has emerged as New Cale donia’s major trade customer over the first half of 1970, displacing France as the territory’s main client.

Through January - June, Japan’s purchases from the island totalled SA37 m., i.e. 51 per cent, of total Caledonian exports. France took 43 per cent, of the territory’s exports, valued at $3l m.

The Japanese position resulted

from her large purchases of Cale donian nickel ore, which were valued at $3O m. over the period concerned.

For imports into New Caledonia, main supplier was France, which sold the territory $33 m. worth of goods, i.e., 49 per cent, value of total im ports.

Second major supplier of goods to New Caledonia was Australia, pro viding the territory with 14 per cent, of its total imports, valued at $9 m.

After France and Australia, prin cipal nations supplying goods to New Caledonia were USA (8 per cent.), West Germany (6 per cent.), Japan (3.07 per cent.) and UK (2.79 per cent.).

Imports were up CFP2,837 m. over the first half of last year. Taking into account the 12i per cent, de valuation of the French franc in August, 1969, this is equivalent to an increase of SA2O m., i.e. 40 per cent, rise.

According to statistics released, sig nificant import increases were in metal products (including construc tion and mining equipment), cement, coal, sugar and timber, in decreasing order.

Potlatch operations

are beginning

Latest official word in Apia is that the Potlatch timber operations at Asau will commence in October.

Final touches are now being put to the new residential buildings and factories.

The West Samoan Government has announced that all tree owners will be paid royalties, and that the gov ernment will get 25 per cent, of Potlatch’s profits as well as other revenue.

Prime Minister Tupua Tamasese said following a recent visit he made to the Potlatch facilities in the United States that his government no longer had any doubts that Potlatch was giving the Samoan people “a fair deal” in the timber contract.

Copra again

strengthening

After a weakening trend which began at the beginning of July and continued until the final few days of August the market for Philippine copra has shown a strengthening ten dency and prices currently being quoted for September/October de livery UK/Continental ports are some SUSS per ton better, the P-NG Copra

Marketing Board reported from Port Moresby on September 21.

The board added: “Although no factual reports of crop damage have been received in the markets of the United Kingdom and Continent it is probable that the recent floods in Luzon influenced Philippine prices, as they have doubtless caused harvesting d i- “Receivals into board depots began this calendar year considerably below the tonnage for the same period in 1969, but latterly production levels have increased strongly and at the end of August total territory production at 85,837 tons is approximately 1,300 tons above the level for the first eight months of 1969.”

Inquiry called for

on P-NG co-ops.

The P-NG House of Assembly has pricked the co-operatives’ balloon in New Guinea, Member for Angoram, Mr. Peter Johnson, has talked the Assembly into a commission of inquiry into the government-run co-operatives movement, in the face of financial troubles and co-operative failures in many parts of New Guinea.

The 380 separate co-operative societies (annual turnover s7m) are vital to the development of business among native people, who are com plaining louder than ever nowadays

that their commercial and industrial economy is mortgaged by Australians.

As long as two years ago, there were nasty rumours that the huge Chimbu Coffee Co-operative (Kun diawa, Chimbu District) was in trouble, and that its 17,000 native shareholders were getting cranky over sparse dividends. More recently, there have been reports that financial trouble had also hit the Co-operative Wholesale Society (Lae) which began in April, 1969, to/act as the bulk buyer and supply line for about 60 per cent, of the country’s 380 separate societies.

In parliament, MHA Peter Johnson put the rumours and suspicions into words:

‘The Deputy Administrator (Mr.

A. P. J. Newman) admits here in parliament that the Co-operative Wholesale Society is in serious financial trouble ... and I now have further information that the Whole sale Society (paid-up capital $150,000) has on its books potential bad debts of $lBO,OOO. Their chief accountant (Mr. Alan Davidson) has resigned, and I understand the general manager re cently resigned ... and did they see the writing on the wall?”

Mr. Johnson pulled no punches: “The An gor a m Native Society Limited (East Sepik) lost $6,000 in one year , . . and a government man has just told Angoram’s 2,000 native shareholders that if the society goes into liquidation, they’ll get 20 cents back from their $lO shares.

“All this after being told by a government officer in 1961 that within six months, they’d put every other trader on the Sepik out of business!”

Mr. Johnson said it was obvious from the Government Gazette that other societies throughout the country were also failing: the implication, he said, was that the small societies could not pay their way and were in great difficulties—because of negligence, lack of experienced super vision, lack of business knowledge, and in some cases, downright theft by many employees.

Returning to the Angoram society, Mr. Johnson said the native share holders were distinctly unhappy with the way the government had run their co-operative society “even after the government was aware that things were going badly.”

Mr. Johnson said it was time for the Government to stop hiding the facts. The only answer was a com mission of inquiry. However, the Administration has yet to decide whether to go ahead with the inquiry which the House of Assembly wants.

Schweppervesence

in the South Seas

Schweppes (Aust.) Ltd., a major soft drink manufacturer, and soon to become part of the huge Cadbury- Schweppes confectionery, food and drink complex, has plans for ex pansion in the South Pacific. The company recently linked with Innes Tartan (NZ) to have its products bottled under franchise in Fiji.

The managing director, Mr. R. A.

Delohery, at a news conference in Sydney on September 17, said the company was negotiating two further franchises in the South Pacific, but declined, at that stage, to name the island groups.