RAILWAY TARIFFS

Evening Post, Volume CIX, Issue 46, 24 February 1930, Page 10

RAILWAY TARIFFS

A COMPLAINT ANSWERED

WHAT IS SOUND BUSINESS?

The General Manager of the New Zealand Railways (Mr. H. H. Sterling) interviewed to-day regarding the statement mado by Mr. W. Seavill, chairman of the Farmers' Auctioneering Company, of Hamilton, in regard to the railway rating policy, said that he was quite at a loss to understand Mr. Seavill's ideas of equity and sound busi-

'it was Hie very opposite of equity that tlio Fanners' Auctioneering Company should send its high-rated, goods by road, while.continuing to scud lowrated goods by rail, yet this was what it was doing, said Mr. Sterling. Mr. Seavill said that business should be. carried on a competitive basis. Even accepting Mr. Seavill's own statement in this respect, they still had to consider what was fair competition. The present action of the company was obviously unfair to the Railway Department. But even apart from that circumstance, if the competitive.standard was to operate at all, it must,operate on the whole field of traffic and not be confined only to those goods which fell into the. high-rated classes. If the-rates on the lower-rated goods were to be determined by.competition as Mr. Seavill apparently Would have it, there was no reason why the Railway Department, on Mr. Seavill's own showing, should not raise those rates to the standard adopted by his company itself, namely, the rate at which traffic could be carried by road. This was all the Department was doing. As had been frequently pointed out, in devising railway tariffs the-traffic had to be considered as a whole. In New Zealand the policy had aimed to keep the rates of goods in the lower categories down to the' minimum, It was quit© obvious, however, that the capacity of the Department'to'maintain these rates depended on its receiving the more lucra-tive-tra-ftic. To the '.extent to which this traffic was taken' away the capacity to' maintain these rates was reduced. ' ■' ';'' '. " WHAT.THE POLICY MEANS. "We reach the position, therefore, that if the action taken by the Farmers' Auctioneering Company is allowed to go on unchecked the result must, as I have pointed out more than once, be 4 a general increase in the lower rates," said Mr. Sterling. "Such an increase would, 'of course, penalise many people who have not adopted the unfair policy pursued by the Farmers' Auctioneering Company, and the Department's present policy is designed expressly to avoid this position; It is designed only to prevent; those who deprive the Department of the capacity to give low rates from continuing to li,ave those low rates. In other words, the policy, in essence, is simply applying to each man tho_ standard of-, transport charges which he himself , chooses .to set up. From the community point of view it is regrettable to note that the company is a very large factor in continuing a form of transport which, is competitive with the national system, the only effect of which is to allow the company to gain some measure of benefit largely at the expense of those who have to pay for the damage, to the roads." ; The/Departments policy was therefore in the best interests of the.farniing community on whom a great propor-> tion of this expense fell. ; From the point of view of,sound business, Mr. Sterling "said that undoubtedly .the"'Department was in duty .bound to ■ take steps to protect the national concern against exploitation of the nature he had mentioned. Every business must use every reasonable means that lay within its powei- .to protect itself. There could be no possible doubt that the action that had been taken by the department was justified from every point of view of equity and sound business. It was unfortunate that Mr. Seavill's company had, notwithstanding every effort of the Department's offi. eers to prevent its doiug. so, adopted a short-sighted policy in .its relations with the Department.