15 FEBRUARY 1935, Page 3

Mystery of the Red Star Liners - No spokesman of

the Government has yet consented to give a full and intelligible statement of its reasons for preferring that the Red Star vessels should be bought and run by a German- company rather than by a British company. The reason originally given was that the 'pro- posed new venture for carrying passengers at low rates would interfere with the rationalization aimed at by the White Star-Cunard merger, in which the Government has an inter- est. But what is to prevent these vessels from being used competitively under the German 'flag? Mr. Chamberlain only replies' that he' has- " seen a report" that they will carry passengers at Conference rates. But what is to prevent • the -British company which wished to 'acquire the Red Star vessels from building new ships for a cheap Atlantic service ? Mr. Chamberlain admits that the Veto could not be exercised in such a case, since it would involve no question of transferring_ capital to a foreign vendor. The Treasury's power for infhiencing move- ments of capital to foreign countries has been used for a purpose which was never intended and has never been contemplated. •