STATE IN BUSINESS.

Auckland Star, Volume LIX, Issue 222, 19 September 1928, Page 17

STATE IN BUSINESS.

MEETING COMPETITION. A REPLY TO CRITICISM. SPECIAL COMPETITIVE RATES. (By Telegraph.—Own Correspondent.) HAMILTON, this day. An article under the caption of "The State in Business," in which the Railway Department is criticised for alleged unfair competition, has appeared recently in the Press throughout New Zealand. A reply to thie has now been made by Mr. E. Oaeey, Divisional Superintendent for the North Island of the Railway Department, in which he states:— "The criticism of the alleged unfair method* of the Railway Department is wholly based on the incorrect assumption that the acceptance of traffic at a special competitive rate involves a loss to the taxpayer. The mention in the article of 'A' class rates, which ar« the highest rates in the Department's classification,, and apply to only a very small proportion of the total tonnage curried, is as unfair as it is misleading. The statement that the Department quotes special ratee at the expense of tho taxpayer is also absolutely incorrect and is indeed a complete reversal of the true position. The fact is that the De-partment quotes special rates to meet special circumstances, as efoes every transport concern the world over —including the Northern Steamship (Jompany—simply because it is better to have the traffic at the special rates, though lower than the standard rates, than not have it at all, and to that extent the taxpayer, far from being involved in additional expense, ie in quite the opposite case.

"It is quite true that until the Auckland-Whangarei and the WaihiTaurangu lines of railway were completed, the Northern Steamship Company enjoyed practically a monopoly of passenger and cargo transport to those districts. Apparently this position was unsatisfactory to the people of these districts, for they clamoured for' railways. These railways, costing millions of pounds of the taxpayers' money, have been handed over to the Railway Department to run on commercial lines in the interests of the owners—the genenil public.

"It wae inevitable that, with the extension of the railway system, giving increased facilities for both passenger and goods traffic, other forms of transport would inevitably suffer, and having in mind the enormoug public capital involved In these railways and the fixed charges incidental thereto, the Railway Department would be false to its trust did it not use every effort to secure for , the people's transport system the maximum of the people's business. "The Department is justified in meeting competition, whether by land or sea, in the recognised commercial manner— by adjusting its rates to meet the local position (as the Northern Steamship Company has done and is still doing). The contention by the writer of the article that the use of ordinary business methods in the matter of fixing special rates should be the sole prerogative of private concerns is too palpably ridiculous to warrant discussion. "Tho increase in charges referred to in the article under review applied not only to the Northern Steamship Com-

pany, but to all other companies. It is curious to note that the Northern Steamship Company for years enjoyed the benefit of special rates to ports served by its steamers, but it apparently saw nothing wrong with special rates then. With the opening qf the through connections* to Auckland the continuance of these rates would have amounted to nothing less than a subsidy from the Railway Department for the benefit, of its competitors. So also with time-tables—these have been adjusted to suit the public needs as they can best be served by the Railway Department. What more can be expected of the Department? Should it continue to run trains to connect with boats when the facts show that the rail route meets the requirements of the public T "The whole matter resolves, itself into a very small; compass—-the railways entered as anew factor into a business that previously was the virtual monopoly of another system of Vansport. It has gone after the business by the ordinary methods, and its efforts have succeeded," . v