COMPANY MEETING
LAMPORT AND HOLT LINE
SIR PHILIP HALDIN ON REPLACEMENT
THE annual general meeting of Lamport and Holt Line, Limited, will be held on March 4th, in London.
The statement of the chairman, Sir -Philip Haldin, circulated with the report and accounts, which will be taken as read, is as follows:— The profits for the year amount to £174,474. We propose to place £100,000 to depreciation, to pay a dividend of 6 per cent., which will absorb a net figure of £26,784. The dividend has been snown in the balance-sheet in its net form so that it may be clearly seen how small is the sum received by our shareholders after the deduction of income- tax. Replacement reserve has received an additional £918,900 owing to losses, but, although the insurance recovery exceeds book values, that amount is much below replacement value ; so we come to the vital problem which I deem it essential now to put before you. rr A VITAL MATTER It is the problem on the one hand of the replacement of our ships wearing out more rapidly through war usage than through the normal pre-war deterioration from age, and the problem on the other hand of the replacement of our ships lost by either war or marine peril. Replacement in both these cases is essential not only for us but for all our men afloat and ashore whose livelihood depends on the survival of the British Mercantile Marine ant* its successful future as the industry most important to this great Empire.
It is as well that you should realise that we cannot make adequate provision for replacement of our ships in the financial position in which we find ourselves today, and, indeed, in which we have found our- selves since the outbreak of war. The reason is simple ; we are neither earning sufficient to provide for a reserve to meet the ever-increasing cost of shipbuilding, now about double that of pre-war, nor are we permitted to insure all our vessels for their full replacement value under Government insurance schemes. It is true we have received a nebu:ous promise from the Government of the day that they recognise the necessity of maintaining the British Mercantile Marine in adequate strength and in a position of full competitive efficiency" after the war, but goodness knows what all that really means. After the war, when the nation's coffers will in all probabihty be nearly empty, what help are we likely to receive for replacement in order to maintain the British Mercantile Marine " in adequate strength "?
IMPORTANCE OF IMMEDIATE ACTION
Now is the time to provide us with sufficient funds to replace our deteriorating and war-worn vessels, not after the war. Now is the time to permit us to insure our vessels for their full replacement. value when lost by marine or war peril.
The Supply Services have been obtaining the use of our vessels for nearly two and a half years at such low rates of hire as would make one almost blush at their modesty, and it is time these departments should pay an adequate rate for their tonnage from which could be accumulated the requisite amount necessary to cover the increased cost of replacement. You might well ask what amount shou'd be provided for this purpose. That is a difficult question to answer, and will require the careful consideration of our industry. I can only tell you what is passing in my own mind.
INCREASED DEPRECIATION ALLOWANCE NEEDED
Before the war, when shipbuilding prices fluctuated in a normal and reasonable manner, 5 per cent, per annum depreciation, based on a 20-year life of a vessel, was the usual figure aimed at. Now that is changed, for a requisitioned vessel, even after undergoing recon- ditioning, would in all probability not have the same longevity as a vessel which had not been subjected to war strain. Thus the figure of 5 per cent, for depreciation would require to be increased to com- pensate for the probability of earlier mortality. How also are we to meet the present cost of shipbuilding, when, for example, vessels similar to our 'D" type of motorship are swing about double the price we paid for them before the war? We always have aimed at providing depreciation to meet a normal replacement cost, but not an abnormal replacement cost. If this' abnormality had occurred in pre-war days we should certainly have had to provide double the rate of depreciation until such a time as the cost of the units of our fleet became stabilised.
Whatever increased allowance for depreciation may be eventually agreed with the Government, it must, of course, be free of taxation,
otherwise it would be useless. At the same time, 1.-feel sure that shipowners would be willing that such increase should be placed in a fund under safeguard for the purpose of being used for depreciation only.
And now what of our shins already lost by war or marine peril, the replacement values of which at the time of their loss we were not able to insure? The least assistance the Government could give us would be the granting of a shipbuilding loan .for a long oeriod at a nominal rate of interest, for the difference between the amount recovered by insurance and the cost of actual replacement, and, finally, the granting of immediate permission for all existing vessels to be insured for their full replacement value. These terms are the bare outlines of a scheme to safeguard the future of the British Mercantile Marine as I see it.
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