ROAD SERVICES

Grey River Argus, 22 September 1937, Page 6

ROAD SERVICES

Auckland Inquiry BEFORE STATE TAKES OVER. AUCKLAND, September 21. An estimate that for an expenditure of £l,BOO, the Railways Department and the public of New Zealand will make an annual piofit of £24,00 J through the purchase of road goods transport services, was made to-day by Mr. L. P. Leary, before the Transport Tribunal, in suggesting that the compensation offered for goods transport services that were being taker over by the Government represent.ee much less than justice to the opera tors. The tribunal consists of Sir Francu Frazer (chairman), and Messrs L. H Heslop and S. S. Millington, of Wei lington. Mr. Meredith appeared fa:

the Crown. The case of Felton’s Waikato Transport Ltd., occupied the attention of the Tribunal to-day, Mr. Leary representing the Company. Mr. Meredith referred to the chaotic competition of road transport which had engaged official attention in every part of the world. It was obvious their operations must ultimately come under control, and inevitably cease. He spoke of the ill effects brought about by road trans port, and said the companies were asking for compensation on something they never had, namely the right to run in perpetuity. During the evidence before the Tribunal, it had been pointed out tnat the gross earnings of Felton’s and McClymont’s services in Waikato were' £36,000 annually. As an allowance in compensation for the loss of their businesses, the two firms are offered a total of £l,BOO by the Government, in addition to the valuation of plan, equipment, etc. It was admitted by Henry Valentine, Second Assistant General Manager of Railways this morning, that he would estimate the additional costs to the railways in running these services at one-third of their earnings. This, Mr. Leary submitted would give the Department a profit of £24,000 annually in perpetuity. Even if the Government took them over as road services, rather than including traffic in the railways earnings, an annual profit of £12,000 would result.

Mr. North appeared for McClymont’s Transport, Ltd, whose service between Auckland and Hamilton was investigated. The economic viewpoint on transport regulation and goodwill was developed by Dr. H. Belshaw, Professor of Economics at Auckland University College. Asked whether the railways would have suffered under a system of unlicensed road competition, he said he would expect this to take place. In the first instance, the tendency would be to take business from the railways, and if this did not provide road operators with sufficient business, they would undertake further price cutting. In the case of a man who was taking £l,OOO a yeai out of his carrying concern, witness would say that he would be entitled to considerable compensation; but ho was unable to name a figure without full knowledge of the facts of the particular concern.

Opening the case for the company, Mr. North said the Government had very fairly set out what it proposed to do, and to transport operators the order of reference for the tribunal’s guidance represented a reasonable attitude. The use of the words "service” and “assets” contemplated payment for goodwill, but it was to be separated from any degree of monopoly value arising from the restrictions of the Transport Licensing Act. It was the Government’s desire to pay compensation in respect to the confiscation of a service, and the suggestion was to be liberal rather than niggardly; but this fact had been I totally unappreciated by the purchasing officers of the Railway De- ■ partment. “The problem of road and rail has existed in every part of the country,” said Mr. North, “and the Government at this stage cannot approach the question fairly without full recognition of the fact that these road operators have spent the best years of their lives developing an industry which at the present time, and certainly not when it commenced, is considered to be against the public interest.” Mr. North submitted that there was no suggestion in the order of reference that if the operators had experienced a good time the Govern ment could take away their businesses for nothing.

CHRISTCHURCH TAXI LICENSES, CHRISTCHURCH, September 21. Fifty-four taxi-companies and individual owners applied to the Metropolitan Licensing Authority, to-day for operating licenses, this being the outcome of the action of the Minister of Transport transferring the control of taxis from the City Council to the Authority. The Chairman, Mr. J. W. Beanland denied the Authority had already decided upon a reduction in the number of cars, saying this would depend on the evidence. In applying for fifty-eight licenses Hon. Hayward, M.L.C., estimated the running costs at 7ld per mile, and said a reduction in fares would be suicidal.