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JANUARY, 1880.



HE attention of all classes has been attracted to the

depression of trade, a depression which affected not one alone but all branches of commerce, those

dependent upon one another having more especially suffered. The bad grain and hop harvests probably represented an absolute loss of thirty millions of pounds sterling. The cause of the late depression could be traced and satisfactorily explained by a Senate or Council composed of representatives of persons and bodies engaged in the separate branches of commerce involved. Failing the report of such a representative body, explanations far from satisfactory or comprehensive have been given ; and at the present time, on the broad question of the general depression, little beyond the fact that it has been universal can be said. It would be a great help, therefore, at the present time, when everybody is hoping " things are better," if leading men would dispassionately, through the press, give their opinion as to the causes of the depression in their own business, whatever it may be. The manufacturers of iron and steel, and the brokers in the metal, the colonial, and the corn trades, for instance, could give their views of the causes of the late stagnation and dulness in their businesses,



and of the improvement therein. The details, perhaps, would be long, and the questions to be considered intricate and many: they would involve consideration of the competition of foreign markets and the expense necessary for machinery required to substitute steel for iron; the narrow margin of profit to merchants or specu lators, and the restricted advances of bankers, and many other points which indirectly influence such businesses. The owners o collieries, again, could give their views, excluding perhaps, the vexed questions which arise from strikes. No legislation can help us, except, perhaps, in one or two branches, for the country i happily not prepared to return to protection. Again, the public generally have lost too much money to desire the spirit of wil speculation to reappear, and bankers have learnt a lesson fron Scotland and the West of England that will make them exercise a caution as to the use of their clients' money. From the hig! prices of coal a few years ago, it is possible that too many nev collieries were opened, and a demand arose for coal in all part of the world even at the then high prices, which prompted th opening of collieries in Japan, India, Australia, America, an Germany. Having once been set going they are now able t supply their own wants as well as those of their neighbours thereby limiting the demand for English coal. English coa mixed with foreign, however, improves the quality of the latter and admits of it being burnt with greater economy, and thi must always ensure a certain demand for English coal. W should also learn how far the advance in science made by engineers has reduced the consumption of fuel required by steamers and the consequent effect, on the demand for coal. In the hop of inducing others to follow our example, as regards the dis semination of useful deductions concerning their own particula businesses, we venture to put forward some remarks on th depression in our own, basing our views upon an acquaintanc of nearly thirty years of the shipping trade, in its different branche and aspects.

The depression in shipping and the unremunerative freight present a large field for inquiry; and for those readers no possessed of a knowledge of shipping property we combine wit) our explanation some few general cautionary remarks. They may be of use, as so few of the general public, although many are shareholders in ships, really understand shipping business and the working of ships. They have invested in ships without any consideration of the manner in which shipping management is carried on. By that good “general public" investments of late years have been made both in ships and in steam-boat companies. A member of the outside public taking a share in a ship may, if he is more than ordinarily versed in shipping matters, know some general facts, such as that, before steam was so universally known, the splendid sailing ships of Messrs. R. and H. Green, Messrs. Money Wigram and Sons, and Messrs. T. and W. Smith, now remembrances of the past, chiefly took the Indian passengers and goods. Shipowners' societies have their existence everywhere for protective purposes, and Lloyd's Register of Shipping ensures, by its superintendence of the building of nearly all steamers and ships, sound workmanship and complete equipment, and duly registers those so built. The Board of Trade carries out most efficiently the various Acts of Parliament regulating the complex machinery necessary, and providing restrictions to secure the safe navigation of vessels, and protection as far as practicable to life and property. A ship or steamer is held in 64 shares, and

any person, being a British subject, may hold one or more, but the number of registered owners must not exceed 32. Any owner may split up one share into smaller shares, but no fraction of a share can be registered. The managing owner is supposed to have the largest interest, and to be chosen by all the co-owners, as he is responsible, prima facie, for the debts of the vessel. Members of the outside public thus investing cannot however be expected to know that though in theory every bill of sale should appear at the Custom House on the register of the vessel, great abuse exists as to registration, which misleads persons having to deal with ships, and is unjustifiable under any circumstances. The only official record of title is the entry in the register books, but private and unregistered bills of sale are given even for half shares, and managing owners often appear on the official books to hold more shares than they actually have, thereby deceiving persons at home and abroad who, relying upon the correctness of the register, which is their only source of information, give credit to the vessel and her registered


Private bills of sale are doubtful securities to the holder until registered, but they can be registered at any time, therefore if a managing owner gets into trouble, his co-owners may find that his entire number of shares has been sold to and registered by persons quite unable to pay the debts of the ship, when those of the remaining registered owners who can pay are obliged to defray the ship's debts. In a case which lately happened, an owner of two shares had to pay not only his own share of debts, but those of his co-owners. Mortgages again are often given and not registered, although non-registration imperils the security, as in the case of bills of sale ; and there is nothing to prevent money being advanced on shares, if the register makes the ship appear as if owned by a person and wholly unencumbered though he may have given private bills of sale unregistered previously. If the holder of a bill of sale gets it registered first, he defeats the mortgagee's security, and vice versa. So many cases have come to light of securities being doubly pledged, that the fraud we have suggested is anything but imaginary. On sound commercial principles, no man of business should hold a bill of sale of, or mortgage on, any vessel without having it instantly recorded in the register book at the Custom House, for it is unjust to others as well as dangerous to himself to neglect this. Moreover the liability of holders of private bills of sale is more extensive than many people suppose, and frequently an unregistered owner can be made liable for supplies to the ship. Trustees and executors would do well to bear this in mind. But assuming that holders of private bills of sale can be held liable under certain circumstances for the ship's debt, yet it is for the creditor to establish the liability, which is most unfair ; and the only legislative remedy would be to compel the registration of the name of every holder of a bill of sale or mortgage; then the creditor would only have to look to the register to ascertain who is responsible to him. This is the intention of the law now, and all that is needed is that the intention be fulfilled. Turnbull's Register of Shipping for the East Coast gives particulars of the registered holder of each share, and it is a pity such a book

does not exist for London, Liverpool, Glasgow, and other places. For the payment of one shilling at Basinghall Street, similar information can be obtained from the Register there, but to be of practical use, it wants compiling by some intelligent man into a book for each port, with the addition of the registered mortgages, for with the assistance of such books as these the creditor, at any rate in England, could see at a glance whom he is trusting, and thus protect himself from loss. The member of the outside public who invests in ships often cares for none of these things, and suffers accordingly. One great cause of increase in the number of steamers has been the profit which, in some ports more than others, accrues to managing owners in such capacity; brokers and others often "place" the shares of ships, taking a small number themselves to secure the management and consequent profit. Shipowning, as a distinct business, as formerly existing, has been considerably altered, and some ship-brokers combine both characters. It is thought that managing steamers, and holding shares with other shipowners gives a backbone to a shipbroker's business. So it does, and has done, while business was brisk, and 30 and 40 per cent. was made by owners generally on their shares, and some managing owners then (what with brokerages every few months on the chartering, and on the insurances, with the addition of the managing commission), possibly secured 50 to 60 per cent. on their shares. In a depressed time like that which we have just passed through, ordinary owners get a smaller interest on their shares, although a good interest is often secured to the managing owner from his brokerages and commissions, &c., and the misfortune for other owners sometimes is that the managing owner's other interests are not always the same as those of his coowners. Would a merchant who receives tea from China, produce from India, sugar from the West Indies, or corn from the exporting countries, place his cargoes in the hands of brokers in Mincing and Mark Lanes, if he knew those very brokers had produce of their own to sell, and had their own interests to serve as well as, if not before, those he entrusted to them ?. Yet an analogous proceeding not infrequently happens in the shipping business. In some ports, those persons who have shares in steamers, and go in purely for shipowning as a business, charge only (say) £100 a year for counting

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