The proprietors of the Peninsular and Oriental Steam Navigation Company
On Tuesday, the 12th June, 1900, at One p.m. precisely.


2nd June, 1900.

The Directors have now to submit their Report for the half-year which ended on the 31st March. As the Proprietors are aware, the half-yearly meetings are held for the purpose of receiving a Report and declaring a Dividend in anticipation of the result of the year's work, of which the accounts are submitted at the close of that period.


Some political significance has recently been attempted to be given to the employment of Indian Seamen on board British ships, and this Company, as carrying out important Mail Contracts, has been singled out for animadversion because the law as prescribed by the Government of India for their own subjects differs from the Merchant Shipping Act of this country. The controversy may have some important results in its bearing alike on the employment of Indian Seamen and on the peculiar conditions of the Company's work. It seems important, therefore, to show that whatever may be the result, the action of the Company has been in this, as in all other transactions, perfectly above board and straightforward. For this reason the Directors. include in an appendix to this Report, a letter addressed to the Board of Trade, inviting a competent ]egal decision and setting forth as briefly as possible, the true facts of the case.

From: a staement of the positions and operation of the company from its incorporation to the present time. (p80 1866)

Connected with the outlay of capital in plant, and the amount of expenditure in maintenance and material, is the cost of superintendence, and the salaries of the staff necessary at so many distant stations. Including London and Southampton, no less than fourteen principal and subsidiary establishments have to be kept up. Many of these are in parts of the world unfavourable to the health of Europeans, and the rates of remuneration to the superintendent, clerks, storekeepers, engineers, boiler makers, coppersmiths, blacksmiths, joiners, carpenters, and artizans of all trades are high in proportion. The same applies to rates of pay afloat, the wages scale being about 50 per cent. higher than on the home stations; hut this is not the only drawback as compared with the cost of operations conducted nearer home, the effect of climate places a large percentage of these employe's constantly on the sick list, so that the Company have to engage a larger number of persons than would otherwise be necessary. The constant conveyance of the officers and servants of the Company to and from the East entails an expenditure of no small amount. At the present time the Company have in active service.
Agents and Superindendents
European Clerks and Assistants
Native Clerks


Brought forward
European Mechanics and Labourers
Native ditto ditto

carried forward
Clerks in charge
Pursers' Clerks
European Firemen
Native ditto
Brought forward
Quartermasters and Gunners
Able Seamen
Ordinary ditto
Native Seamen
European Stewards
Native ditto
carried forward
Afloat..... 8,250
On shore..... 4,351

The above takes no account of the coal labourers and coolies employed at  various stations in coaling operations.

Peninsular and Oriental Steam Navigation Company,
122, Leadenhall Street, E.C.,
25th May, 1900.

Referring to the correspondence which has passed between the Board of Trade and this Company on the above subject, and especially to the Board's letter of the 26th March last, to the effect that an opportunity would be afforded the Company of obtaining a legal decision in this matter on the return of the "Australia" to London, I am desired to inform you that this vessel is due on the 3rd of next month, and that arrangements might, therefore, be made to bring the dispute into Court.

In a Memorandum submitted by the Company to the Board of Trade in February of last year, touching the case of the "Australia," it was shown that in that vessel space had been reserved for her crew to the extent of 100 tons more than the crew space of the "Ophir", a steamer of identical dimensions and power, competing with the former vessel in the Australian trade, and the following observation then occurs:-

"At the same time the Company have no desire to quibble over this matter of crews and crew spaces. If it can be decided authoritatively that, notwithstanding the Indian acts and the shipment of natives in India under these acts, the law requires that natives should be allotted the space of Europeans, there will he an end of any dispute on the subject, and the Company are perfectly willing to agree to some friendly legal process by which the point in question may be decided."

On the same occasion Sir Thomas Sutherland received a semi-official letter from Mr. Ritchie, in which the latter stated that "every consideration will be given to any representations which your Solicitors may make as regards the procedure for obtaining an authoritative decision upon this question."

The Company have, therefore, consulted their Solicitors and Counsel as to the procedure which ought to be followed, so as to obtain an authoritative decision, and they are advised that "an action might be started in the Commercial Court and appealed, if necessary, to the highest tribunal, while on the other hand proceedings before a Magistrate would not be of the same satisfactory nature nor admit of an appeal of the most authoritative kind." Counsel add that, in their opinion, some procedure could be arranged to this effect if the Board of Trade intend to raise the question.

The Directors are not competent to discuss the technical side of this question in its legal aspect. What they desire to have settled is whether the Merchant Shipping Act of 1894 overrides the Indian Act in this matter. The Indian Acts have been amended on many occasions and the employment of Indian seamen has been fully provided for as regards accommodatiQn and dietary scale, and while the Company have held themselves bound by this legislation, it is perhaps unnecessary to add that in these respects the arrangements made by them have always been on a more liberal scale than required by the law in question.

It would certainly appear right, therefore, that, in so important a matter, the decision to be taken should be founded on the most authoritative interpretation. In an answer given by Mr. Ritchie to one of the'numerous questions put to him in the House of Commons (in March last year) he truly observed "that the effect of these various enactments is, that it is by no means clear whether the direct obligation in respect to crew space of th,e English Act or the Indian Act obtains in regard to Lascars, and that the matter was being referred to the Law Officers of the Crown and the Indian-Government." However great may be the value which must necessarily attach to the opinion of the Law Officers (and certainly the Directors would attach the utmost value to their opinion, if they knew what it its entirety), yet it would surely be right that the view of the Law Officers should be confirmed by the highest tribunal, before the law of India, made in the interests of the Indian subjects of the Queen, should be set aside as futile and inoperative.

So far I have treated simply of the legal aspect of the matter in view, but it appears necessary to the Directors to make the position of the Company clear in another way.

They desire in the first instance to express their regret that the President of the Board of Trade should have been exposed to attacks in his place in Parliament, in regard to a matter with which the Company's name is connected, but they at the same time not only do not admit, but they absolutely repudiate the suggestion of any laches or shortcoming on the part of the Company, and they hardly think that Mr. kitchie was justified in alluding to the Company on the occasion of a recent discussion, in terms which suggested that the latter were in some way or other not above reproach in this matter. The Directors do not, however, attach undue importance to hasty phrases, which are occasionally uttered in the course of debate, but as this controversy may have some poJitical significance in its effect on the employment of Lascars, they deem it necessary to set forth the facts of the case, so far as the Company are concerned, in the clearest manner, but at the same time as briefly as possible.

In the first place, the Company have carried mixed crews of Europeans and Indian Seamen in their ships for more than half-a-century, to the contentment ahd satisfaction of the crews, and with the utmost efficiency throughout the extensive public Service which the Company have been called upon to carry out.

Secondly.-The Indian portion of these crews is not engaged under the same conditions as Europeans. They are shipped in what may be called (for~want of a better phrase) a patriarchal system, which allows of apprentices and even old men forming a portion of the establishment, a system which leads to the employment of a far larger number than would be found in a European crew. The "Australia", for instance, carries a crew of -----

110 Europeans and
169 Natives, making a total of 279 souls,

while the "Ophir", whose case has already been quoted in this letter as a ship of the same size and power in the same trade, is amply manned with a crew of 203 Europeans. The excess in the numbers carried by the "Australia" is exclusively in the Deck and Engine room crew.

Thirdly.-The Indian portion of the crew is necessarily engaged under the provisions of the Indian Act, which specifies the dietary scale and accommodation to be provided, and in both respects the Company have fulfilled the provisions of the Act in the most liberal manner.

Fourthly.- No question has ever been raised on these points by the Indian seamen themselves, who, on the contrary, have merely sought to be let alone, and the agitation which has proceeded in this matter has been an interested and insincere agitation: It would have been open to the Board of Trade to say that so long as the Lascars made no complaint and the Indian law remained what it is, there was no case for their intervention. But the Board of Trade apparently adopts the view that, while admitting the Company to be bound by all the conditions of the Indian Act, yet that they may and should be penalised in the tonnage of their ships under an English Act which has no direct bearing on the status of Lascar seamen. It remains to be seen whether so inconsistent a situation really arises in point of law, but even if such should prove the case, it is difficult to see wherein lies the advantage of the Lascar. May it not be presumed that the Indian Government knows best what is for the interest of the Indian seamen?

Fifthly.-When the Suez Canal was opened, the Directors provided the steamers using that route with European crews exclusively, but it was found impossi~e to carry out the India and China Mail Services satisfactorily, owing to the too frequent insubordination, intemperance and inefficiency of the European seamen and firemen, when working in the tropics, and the system of mixed crews had therefore to be reverted to. That system has worked admirably in point of good order, discipline and efficiency.

Sixthly.-The Directors are not aware of any single instance on board their ships of Indian seamen failing in point of duty or in time of danger, and they know of many cases in which they have acted with singular courage in perilous emergencies. Just as our Indian soldiers will do anything and face any danger, when properly led, so will Lascar seamen; and the employment of the latter is just as necessary for the service of our Mercantile Marine as the service of the former is essential to the safety of the Indian Empire.

It is only necessary to add one further remark in order to complete this statement.

If it should be shown that the Indian Act has practicaJly no force, and must be set aside as null and void, the cpnsequences would be to involve a sacrifice in the passenger and cargo space of the whole of the fleet which cannot be estimated at less than, £2o,ooo a year, in order to provide the additional accommodation for the existing crews carried by their steamers (a contingency which, I need scarcely say, was never foreseen in framing the estimates for the present Eastern Mail Service), while the disturbance of the existing arrangements of their ships would lead to an immediate expenditure amounting to a large sum. The alternative is to change the present system of engaging these Indian seamen so as to limit the numbers employed to whatever extent this may be 'done with due regard to efficiency.

But I need hardly add that whenever the law is authoritatively declared, the Directors will ensure its being fulfilled so far as the Company are concerned, in full measure.

I am, Sir,
Your obedient Servant,
(Sd.) G. F. JOHNSON,
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