6 JUNE 1914, Page 2

Lately it seemed that the German passenger and mail service

to Australia would be abandoned, and now it is said that the North German Lloyd may continue the service in return for a heavy subsidy. The most interesting recent fact is the arrangement between the Hamburg-Amerika and the North German Lloyd. By this arrangement competition is eliminated on certain routes, and more attention can be devoted by both companies to improving the service on other routes or creating new services. The writer in the Times thinks that the German policy in the North Atlantic and South American trades may be reproduced in the Australian trade. In that case much larger German ships would go through the Suez Canal, and the P. and 0. and other companies trading to the East would be challenged to join in a large-ship competition. The British companies might do this in combination with one another, if not strong enough individually. We hope that no British Government will ever enervate them with subsidies, except, of course, for the mails and for naval purposes.