Thank you for correcting the text in this article. Your corrections improve Papers Past searches for everyone. See the latest corrections.

This article contains searchable text which was automatically generated and may contain errors. Join the community and correct any errors you spot to help us improve Papers Past.

Article image
Article image
Article image
Article image

STATE CONTROL OF TRANSPORT

Creation of Monopolies Debated PROPOSED PURCHASE Ofl AUCKLAND SERVICES (I'RKHS ASSOCIATION TKLKORAI!.) AUCKLAND, September 17. Whether the Transport Licensing Act had served to create monopolies for road transport services was the major issue discussed by counsel at the first sitting to-day of the special tribunal appointed by the Government to determine fair conditions of purchase for certain goods services which the State proposes to acquire. Most of the morning was occupied by general submissions, but in the afternoon a start was made in the hearing of specific evidence relating to the position and prospects of the five companies which are concerned by the Government’s policy. The tribunal consists of Sir Francis Frazer (chairman) and Messrs S. S. Millington and L. 11. lieslop, of Wellington. In a general submission on the question of compensation Mr Leary, for one company, said it was clear that while the Government intended to take over and pay for the services at a fair price it desired to deduct from their value any worth they might have as monopolies. Mr Leary submitted that the average haulier had no monopoly as a result of this system of licensing. There was opposition from the Railway Department, which had exerted itself to overcome the competition of the lorry by discriminatory tariffs, by extra trains, and by speeding up the service. Moreover, if a firm were not satisfied with the haulier’s prices or the railway rates it could and did put on its own lorries. Right to Future Profits Mr Leary contended that the Government was taking from the operator his right to serve the public and to obtain future profits. Sales to the Government were not of the haulier's seeking and the State should consider the fair value of the future prospects of the concerns which had come into existence in response to public demand. Their activities were to be carried on by the State in the future for its own advantage, and it was because of the very permanence of the businesses that the Government desired to acquire them. Mr Leary concluded by suggesting that the present year should be taken for an assessment of profits. In computing the net profit proper wages of the management should be allowed. Profit should be debited with proper interest on the capital involved, and any percentage due to monopoly value then deducted. The figure obtained should be multiplied by at least seven for expectation of profits. Observing that the transport question had been one of great moment, Mr V. R. Meredith, for the Crown, expressed the view that the value of road services had been largely determined by the monopolistic effect of licensing. Mr Meredith contended that had the licensing system not been in operation during the recent years of trade revival every other person would have put a truck on the road and competed with those firms which were granted licensed security, bringing about the former conditions of uneconomic prices and leaving the railways to cope with all heavy haulage at low rates. The road operators simply look over the high tariff items and under the protection of a licence were given absolute freedom from competition. It was obvious that such a condition could not be allowed to continue. However, operators had this piece of good fortune: they could not only retain the very handsome profits they had made, but also the largeness of these returns should be made the basis for recompense from the public purse now that their “good spin” was over. The Price Offered Referring to McClymont’s Transport, Ltd., one of the companies concerned, Mr Meredith said the value put on McClymont’s vehicles by the purchasing officers was £3185, but the firm, which considered the plant as a complete unit, arrived at a figure of £5754. One of the purchasing officers acting for the Government, Mr Henry Valentine, second assistant to the General Manager of Railways, said it was submitted that the most optimistic carrier could not expect the “golden age” to continue much longer. “It is the intention of the Railways Department in New Zealand to provide such services as will reasonably meet the requirements of the public, and the Crown is prepared to pay a fair purchase price to the present officers,” Mr Valentine said. “It is submitted, however, that the uncertainty of tenure of any road service operator is a factor which makes it impossible to attach any goodwill value to existing licences.” The view adopted by the purchasing officers, he said, was that the goodwill value of any road service should be based on the actual results before the introduction of licensing and regulation. Mr Valentine added that if no goodwill could be established on this basis the purchasing officers had adopted the alternative of offering without prejudice a minimum of 20 per cent, on the value of the tangible assets in accordance with the directions of the Government. Mr North (for McClymont’s): Is it a fact that the department interviewed clients of McClymont’s Transport and threatened them?— They would be canvassed, but I am not aware of any threats.

Permanent link to this item

https://paperspast.natlib.govt.nz/newspapers/CHP19370918.2.69

Bibliographic details

Press, Volume LXXIII, Issue 22201, 18 September 1937, Page 14

Word Count
851

STATE CONTROL OF TRANSPORT Press, Volume LXXIII, Issue 22201, 18 September 1937, Page 14

STATE CONTROL OF TRANSPORT Press, Volume LXXIII, Issue 22201, 18 September 1937, Page 14

Help

Log in or create a Papers Past website account

Use your Papers Past website account to correct newspaper text.

By creating and using this account you agree to our terms of use.

Log in with RealMe®

If you’ve used a RealMe login somewhere else, you can use it here too. If you don’t already have a username and password, just click Log in and you can choose to create one.


Log in again to continue your work

Your session has expired.

Log in again with RealMe®


Alert