RAILWAY TARIFF.

Hokitika Guardian, 25 February 1930, Page 8

RAILWAY TARIFF.

GENERAL' MANAGER’S STATEMENT. WELLINGTON, February 20. A statement regarding tlie railway tariff rate in relation to corn petition was made to-day by Mr H. Tl. Sterling general manager of railways. “Wo have,” said Mr Sterling, “recently been giving much thought to the position that has been developing for some years as a result of some of our customers giving their high-rated goods to competitive forms of transport, while leaving their low-rated goods with the railways. It is quite obviousthat such a practice, if allowed to go on unchecked, must eventually be lead to an increase in the rates on the lower-rated goods. It is elementary railway economics that it is the high-rated business thai enables the railways to keep the rates on low-valued commodities down t( the level that has hitherto obtained It is quite evident, therefore, that according as the high-rated goods an taken from the railways the possibility of maintaining the low rates decreases Wo h ave not arrived at the position ir New Zealand where it is no longei possible, either from a business or an equitable point of view, to postpone action.”

“The easiest way out of the ditficul ty is, of course, to make a general in crease on the charges on the lowei rate goods. Consideration of this pro position, however, at once suggests the injustice that might result from to the railways and have given us tin many people who have remained loya’ to the railways and have jgiveu up tlm whole of their business. There is tin factor, also, of the great desirability of keeping our low rates down to a minimum, both on general grounds find for the reason that Ifrom the special circumstances of the Dominion most of the low-rated goods have a bearing more or less direct on our principal industries. The obvious inquiry suggested by these circumstances is to consider whether some system cannot be envoived that will avoid penalising our customers who have remained loyal to us, while preventing those who have not done so from continuing to reap the advantages of the low rates which by their action they are jeopardising. Clearly the person who tak es away from us the capacity to maintain the low rates can hardly consider himself entitled to those rates. We are therefore taking action that will prevent his doing so. The action is not oidy justified but even demanded, by every reason of equity, not only as between the department and its clients, but also as between the clients themselves, and as between the commute jin general and the railway users, for ■if the present tendency of people to take their high-rated goods away from the department is not checked it will result either in further retrogression as regards the financial returns from the railways or it will necessitate an increase in the low rates. This latter alternative I have already dealt with and indicated that this would involve the loyal customers being penalised because of the action of those who have not remained loyal to the department. As to the former alternative it simply means that the taxpayer is taking over some of the transport costs of to persons who, hv removing their highrated traffic from the railways, have brought about that position.

“Some mention has been made in the public press of the goodwill aspoH of the matter ,and it has been suggested that action along the lines I have indicated will cause the departmenl to lose goodwill with, I presume, a loss of business. The hoot is rather one the other foot. Goodwill in tli }ast analysis is worth the business if brings. Tlie man who takes his hig 1 - rated goods from us and leaves hr ,low-rated goods with us is not a cus tomor because of goodwill but rUb the opposite, 'flic good will that i worth while, and so worth protectin'’ ■and fostering, is that of tlie eustomewho remains loyal to us, and 1 am quite satisfied that, as those eustome’-’ see themselves being penalised throne-' ,1, '> actions of others the goodwill '' r those ‘loyal’ people (to the extent thai we fail to take .such action ns lir>within our power to protect them') will beeome a diminishing qunntitv. There is not the slightest doubt that on the goodwill areaunent. as well as on every argument of equity and sound business, a policy along the lines I have indicated herein is amply justified.”