ever, emphatically repudiated any such policy of intimidation, and it appeared that the cases which had occurred were due to unauthorised action on the part of subordinate officials in certain Conference Lines. We added in that report that we would investigate any complaint of such treatment which might be brought before us, but we have not received any further complaint under this head. 7. To return to the main question. Evidence has been taken by the Imperial Shipping Committee in regard to the deferred rebate system as applying in inter-Imperial trades from the following witnesses : (i) On behalf of the Australian Government (in January and Mr. R. J. Turner, J.P., Chairman of Messrs. Turner, Mr. Lionel Frank, Managing Director of Messrs. Mr. C. T. McGlew, Managing Partner of Messrs. C. T. The Managing Director of a firm of merchants in the Australian Export Trade who did not wish his name to be disclosed. (ii) On behalf of the Crown Agents for the Colonies (October, 1921). Mr. T. D. Holt, O.B.E., Head of Shipping Department. (iii) On behalf of Traders' Associations (November, 1921March, 1922). Sir Stephen Demetriadi, K.B.E., on behalf of the group of Associations referred to under 2 (b) as engaged in the Calcutta Homeward Trade and in regard to that trade. Mr. E. B. Tredwen, Chairman of the Australasian Mer- Sir Stanley Bois, on behalf of the Ceylon Association in Mr. W. Soper, on behalf of the South African Traders' Mr. W. W. Wilson, Chairman of the Jute and Linen Mr. W. H. Hooker, Deputy Chairman of the East Sir Rhys H. Price, K.B.E., C.M.G., of Messrs. Peacock Trade. Mr. David Landale, of Messrs. Jardine Mathieson and Company, Chairman of the China Association, in regard to the Far Eastern Trade. In addition, written communications were received from the West India Committee, the Manchester Association of Importers and Exporters and the British Imperial Council of Commerce who did not send witnesses to appear before the Committee. (iv) On behalf of the Shipowners. Rt. Hon. Lord Inchcape, G.C.M.G., K.C.S.I., Sir Alan G. Anderson, K.B.E., a Manager of the Orient Sir Percy Bates, Bart, G.B.E., Deputy Chairman of the Mr. R. D. Holt, of Messrs. Alfred Holt and Company. Sir Ernest Glover, Bart., as representing tramp-owning interests. The last four witnesses were nominated jointly by the Chamber of Shipping of the United Kingdom and the Liverpool Steamship Owners' Association, who also furnished the Committee with a joint memorandum embodying their views. 8. The verbatim evidence of the witnesses has of course been duly recorded, but following our usual practice, which is largely based on the ground of economy, we have appended to this report only a summary of it (Appendix II) and not the evidence itself in extenso. 9. The whole question of Steamship Conferences and the deferred rebate system was exhaustively investigated by the Royal Commission on Shipping Rings which was appointed in 1906 and reported in 1909.* The main or Majority Report of the Commission gives detailed information as to the origin and history of Conferences and of deferred rebates and as to the features of these systems as existing in the various international trades at that time. It surveys in detail, and discusses at length, the whole of the problems involved and it concludes with certain specific recommendations to which we shall revert below. It was accompanied by an important Minority Report. 10. In all the circumstances and having regard especially to the fact that, as shown below, the recommendations of the Royal Commission had not been exhausted or even to any considerable extent adopted, it became clear to the Committee that it would. be best to treat the present enquiry as supplementary to that of the Royal Commission. Accordingly, it was decided to adopt for the purposes of this enquiry the evidence as given before the Royal Commission and in taking fresh evidence to pay particular attention to : (a) Any changes which have occurred in the application or operation of the deferred rebate system since the date of the Royal Commission. (b) The manner in which or extent to which the burden of complaint against the system has altered. (c) Any steps taken to give effect to the recommendations of the Royal Commission. 11. In the first place it has to be noted that new or additional legislation against the deferred rebate system has since 1909 been passed in Australia, South Africa and the United States of America, viz : (1) Australia. The "Australian Industries Preservation Act, 1906 which the Royal Commission referred as "containing provisions which might affect the operations of shipowners making use of the rebate system" has now been consolidated and amended into the Australian Industries Preservation Act, 1906-10" under which rebates are definitely made illegal. This prohibition of rebates applies to all trades outward from Australia. (2) Union of South Africa. The South African Government passed, in 1911, the Post Office Administration and Shipping Combinations Discouragement Act which attacked the system of deferred rebates through the medium of the mail contract. * Details of the Commission's publications, all of 1909, are as follows:Vol. I. Report (Cd. 4668). Vol. II. Appendices (Cd. 4669). Vols. III. and IV. Minutes of Evidence (Cd. 4670 and Cd. 4685). Vol. IV. Report of Sub-Commission upon evidence taken in South Africa with Minutes of Evidence and Appendices (Cd. 4686). It provides that the Governor-General shall not enter into any ocean mail contract with any person who gives any rebate upon condition of the exclusive shipment of goods by vessels of particular lines. (3) United States of America. The Royal Commission stated that "the system [of deferred rebates] is probably prohibited by the [U.S.] legislation directed not against shipowners in particular but against all combinations tending to create a monopoly." The system is now, however, made definitely illegal by the Merchant Shipping Act of 1916, as amended by the Act of 1920 (Jones Act), and the legislation appears to apply to shipments in both directions. 12. Changes in the operation of the Deferred Rebate System. (i) As a result of the new legislation in South Africa it became necessary for the Union Castle Mail Steamship Company, Limited, who held the mail contract between the United Kingdom and South Africa, to discontinue the deferred rebate system and it was also dropped by the other Lines in the South African Conference. It has been replaced by the Agreement System to which we shall have occasion to refer later. 66 Other changes that have taken place since 1909 are as follows: (ii) Australian Outward Trade.-During the war and owing to causes arising out of the war the Commonwealth Government had become the owners of a considerable number of steamers and after the end of the war this Government Line started regular services in the Australian Trade. In view of the Commonwealth legislation referred to above this Line was precluded from becoming a party to the rebate system which the Conference continued to operate in the outward trade to Australia, so that shipment by the Government Line involved the loss of rebates, which on their part, however, the Government Line was ready to make good to the shipper on certain conditions. It is this position that occasioned the present complaint from the Australian Government and it is the most important development in regard to the commercial side of shipping with which we have to deal, with the possible exception of the South African agreement. (iii) Calcutta Homeward Trade.-The Royal Commission in referring to this trade stated that "the bulk of the cargo shipped is rough cargo such as linseed, wheat and jute, all of which is suitable for shipment by tramp steamers, and upon cargo of this kind it has not been found possible to impose the rebate system."'* The deferred rebate system was, however, introduced into this trade for general or rough cargo in May, 1919, but not for tea, the freight on which is fixed by a separate agreement. * Cf. Cd. 4668. Para. 54 (1). (iv) West African Trade.-During the war, the rebate system in operation in this trade lapsed. It was, however, reimposed about the beginning of 1922 This was done, we understand, at the request of some of the smaller merchants engaged in the trade, in face of the severe competition which they were experiencing from one of the largest groups in the trade who were in a position to load their own ships with full cargoes and also to get the ordinary liner rate when it suited them. The smaller men hope, it appears, by the re-imposition of the rebate system, to restore a measure of equality. (v) East African Trade.-At the time of the Royal Commission, trade with East Africa was little developed and vessels called only irregularly. In time, however, the trade developed, more regular services were run and the rebate system was imposed in both the outward and homeward trades. During the present year the period of deferment has been reduced from six to four months, so that rebates on shipments made, say, during the first four months of the year become payable on September 1st of the same year. (vi) Straits Settlements Homeward Trade.-In 1911, an agreement was arrived at in London under which the Conference undertook that once every three years the overlapping of rebates should cease and shippers be free to leave the Conference without loss of rebates. This opportunity was given in 1911, 1914, 1917 and 1920. 13. As regards the composition and internal organisation of the Conferences, we have received no evidence to show that any fundamental changes have taken place therein, though the membership of certain Conferences has undergone some changes, notably owing to the disappearance of certain foreign lines as a consequence of the war. Moreover, no substantial alterations, other than those above mentioned, appear to have been made in the details of the deferred rebate system as applied in the several trades. 14. Having thus far dealt with the changes that have occurred in the operation of the deferred rebate system since the date of the Royal Commission, we have now to examine the evidence that the shippers have brought before us in support of their complaints against the system and that of the shipowners in reply. A full summary of all the evidence will be found, as stated in paragraph 8, in Appendix II (p. 31). THE PRESENT MAJOR COMPLAINTS AGAINST THE DEFERRED REBATE SYSTEM. (A) Complaints of unduly High Freights and Profits. 15. While some of the shippers' witnesses who appeared before us seemed to be actuated rather by the feeling that steamship Conferences had it in their power to press unduly on them than by any harsh treatment actually suffered, definite evidence was given |