'PHONE CHARGES.

Auckland Star, Volume LXIII, Issue 124, 27 May 1932, Page 7

'PHONE CHARGES.

20 PER CENT'CUT'URGED

VIEWS OF BUSINESS MEN

BRINGING DOWN COSTS,

APPLICATION OF SURPLUSES. To meet the altered conditions of to-day and to coincide with the. move for a general reduction in the costs of production and services, telephone rentals should be reduced by 20 per cent, according to the opinions expressed by representative Auckland business men interviewed this morning. The concession recently accorded certain rural and party lino subscribers is not begrudged, but the contention is advanced that tho Postmaster-General should have gone a step further in his statement on Wednesday and announced an all-round reduction in the charges made for the use of telephones. "The cost of living has come down, tho cost of materials has been reduced, and staff wages have been lowered, so there is no reason why the cost of telephones should not be similarly reduced." said the general manager of a firm which meets an ann.ial telephone rental for its 150 extensions of nearly £700. "Tho proposition is, I admit, a difficult one, and the present system is highly efficient, but in times like the present business houses must receive some consideration. Costs have to come down, and as wages of employees in the Post and Telegraph Department have been reduced by 20 per cent, why has the Department not reduced by the same percentage the cost of the telephone services?" Whether a lowering of the rentals would be followed by increased business it was difficult to predict, since the practice of rigid economy was an imperative necessity, but that was not the point. What had to be faced was the lowering of all costs.

Lesson of Postal Charges. "I think the Department is absolutely stark, staring mad not to reduce the charges for telephones," said, another prominent business man, whose concern makes extensive use of the interphone system. "Surely the Department had its lesson over the raising of the postal charges. When the hand-delivery system was instituted we found 100 letters could be delivered for 3/, whereas it cost us 8/4 previously. And we are not going to throw that over in a hurry! Exactly the same position applies to the telephones. There is no doubt that increased use would be made of telephones by business people if the charges were lowered. It would be a case of 'the cheaper the rate the greater the number of telephones. 5 Por the life of me I cannot understand why a reduction is not conceded, and brought into effective operation at once.

"I say with all seriousness that I would like to own the telephone system of New Zealand for a short period. I would see that everybody who wanted a telephone had one. The charges should be such that the telephone would become indispensable at the price. It is a public utility, and it is a service that cannot be done without by the business community. I am at a complete loss to understand why portion of the Post Office surpluses, instead of being appropriated for the assistance of the Consolidated Fund, have not been applied towards a substantial reduction in the charges to telephone subscribers."

Another prominent business man pointed out that as far as private subscribers were concerned, there were many who would maintain their telephones, even if they received no reduction, but he felt sure that if the rate were lowered, many more people who now thought twice of retaining their connections or of becoming subscribers would not hesitate. A cut of 20 per cent would, he added, afford considerable relief to business houses, and for their benefit as well as that of the general subscriber, it was to be hoped that the Government would see its way to review its decision. Maintaining the Revenue,

The view of the Auckland Chamber of as expressed by the secretary, Dr. lE. P. Neale, is that it would favour a reduction in telephone charges if it could be shown that the gross revenue of the Department, less the extra cost of looking after new connections, was maintained- From a preliminary survey it would appear that that would not be the case. It was a well-known experience of tramway concerns that when fares were lowered, business was increased to a certain extent, but not sufficient to maintain the previous gross takings. The same experience applied to many other types of business, but not to all. There was clear evidence regarding certain classes

of postal matter that, within certain limits, a reduction in charges meant increased gross takings. That was revealed when the 3-Bth of a penny charge on circulars posted in large quantities was introduced.

In pointing out that a 20 per cent reduction in the existing telephone rates would require a 25 per cent increase in new business to offset it, Dr. Neale indicated that the chamber was still open to conviction on the matter. A well-known organisation has as a result of the depression curtailed its number of telephones and is at present discussing the advisability of relying on the one telephone to serve all the offices in its building, if it is unable to replace its remaining telephones by an interphone system, which in Certain circumstances is available at a cheaper rate. An official of the organisation, in discussing the question, observed that the Department appeared to prefer to lose revenue rather than to reduce the charges. In his opinion the object of the Department should not be to make undue profits, but to aim at a reasonable margin, at the same time providing a maximum of service to the user of the system. The Private Subscriber. As far as ordinary subscribers are concerned, it would appear that many people in Auckland have had to dispense with what they iiave always looked upon as a necessity. Thoughtful people, concerned with the balancing of the private budget have on principle cut expenditure to bare essentials, and the telephone has reluctantly been discontinued. This has been the case especially with public servants above the 1 middle grades, who have suffered salary reductions amounting to 27A per cent. It is stated unofficially that in Auckland new connections this year have equalled the number of cancellations, but as the Department consistently refuses to iurnish any information on the subject, th* statement cannot bo confirmed On t other hand, the general »g"»£ n b £ that there must be a wide gg&E. tween now connectjons and canceiiai