EVENING POST. MONDAY, DECEMBER 14, 1908. GABLE RATES.

Evening Post, Volume LXXVI, Issue 141, 14 December 1908, Page 6

EVENING POST. MONDAY, DECEMBER 14, 1908. GABLE RATES.

We were glad to see that in an interview given to the Press at Invercargill on 10th December, the Premier took a very moderate view of Mr. Henniker Heaton's proposal that the ocean cables of intercommunication between the various dominions of the British Empire should be owned Imperially, and that the char go for cable messages should be reduced to one penny per word — irrespective, apparently, of the distance and cost of transmission. The first part of this proposition is indeed excellent in theory. We favour national ownership of all the more important means of social communication, and especially of those which in their nature involve a greater or less monopoly of transit. But only so long as, and so far as. such an ownership can be maintained without incriea'sing dis,p'xop,ortionately the inevitable burden of taxation in a civilised community. In the last half-century we have seen ' the domain of the State gradually extended to boundaries that previously were only dreamed of. And after half-a-century of experience, the conclusion as to the desirability of further extension remains in doubt. Government management is invariably established at somo loss of efficiency, and with a great risk of con- i comitant waste. It is to be welcomed only because the evils of private competition, and private monopoly are the greater. And it has been made clear that the need of constant vigilance on the part of a people is never abolished, but grows more and more important as a State increases the number of functions which it is characteristically unfitted to discharge. In several instances, such as the administration of the Railways, we have seen in Australasia how the inadequacy or incompetency of Government control has forced the transfer of business into the hands of an independent commission of experts. And Parliament knows very well that, in every department of Ministerial activity, the success or failure of administration corresponds with the extent to which an able and responsible officer is given full power to conduct business precisely as if he were conducting it for his own satisfaction and profit. Just in proportion as the conditions of State enterprise approximate to those of private enterprise is the result of work and service profitable to the community. As soon as politics intrude upon the sphere of departmental management, the wheels runs slowly, and tho product ceases to be the best product of which tho machine is capable. Thus it will be seen that the first part of Mr. Henniker Heaton's proposi1 tion depends on the second. Will uni/ersai cable messages at a penny a word pay the contracting Governments? , : It cannot be shown that they will, and ithe risk of loss appears enormous. It is not demanded, of course, that such a service should show a money profit. But t it is fairly and justly to be demanded ' -that there should be no money loss, or at most, such a loss as will not materially lessen efficiency in other fields of Government activity. The general principle is as far as possible to be maintained that the users of a Government ,s,ervice should meet thr : cost of the ser- , or prove, in the alternative, the j (.existence of a compensation not sentifnaantal but practical and real. Our own rnftlways furnish again the illustration respired. Owing to. the extravagant (expenditure due to political manage- • }merrt, the revenue has failed to make for the working equipment of opqn lines by all but £6,C00,000. Of Mies total railways debt of £24,000,000 in routnd numbers, only £18,000,000 has rbeeii spent in the actual construction of *the lines and the initial equipment, wh^sh put them in a state to earn revenue. One-third of the total amount spen^.in building the railways has been boripwed in order to make good the deficiesicy net revenue in operation — this being due almost entirely.

to disproportionately huge expenditure. The result is that railway extension is impeded continually. In the last seventeen years less than six and a quarter million pounds* has been spent in the construction of open lines — an amount which, seems astonishingly small considering the need of railway extension and the capacity of New Zealand to meet the need. But during the same period nearly four million pounds has been spent in stopping the leak in the railways working expenditure. That ;s,; s, an amount equal to nearly two-thirds of the total amount spent in railway construction during seventeen years has been needed to keep the lines going. Nearly four millions sterling which should have been devoted to making •new railways has been poured down the sink of political management. It is certain that New Zealand is in no condition to open such another leak in the Government telegraphic service. Already our single loss on the Pacific cable, with a British rate of 3s per, word, is between £7000 and £8000 a year. Talk of reduction to a penny per word, so far as that cable is concerned, is at present a dream. But Mr. Heaton's propositions are really distinct. Government ownership of the cables does cot necessarily mean reduction of rafes to a penny per word. It should mean only that, as the service earns profits, tho rate will be reduced correspondingly. To such a scheme there is no objection. But a great deal more information will be required before that enterprise can be attempted. It is clear that the scheme involves such a Government monopoly of ocean cables as wo hold at present on the land lines. How much compensation is to be paid to existing proprietors such as the Easti crn Cable Co. ? and what chance of a legitimate reduction of rates will there be when such an initial load has to be carried? We agree with the Premier that "the lowering of the rates to much below those existing is not only possible, but is desirable from every standpoint," and that Government control of cables is a great object to work for. It rests with the advocates of the change to show that the game is worth the candle — that the gain possible to cyble-users does not mean a greater loss to the general revenue of the community. The Premier's illustration from the New Zealand-Australia cable was well chosen to show the possibility of a local beginning of the wider enterprise. Yet even in this case the "penny-a-word" notion appears quite unnecessarily intrusive. It is sufficient, if with a Government-owned cable the rate can be reduced to meet the cost — whether that is a penny, twopence, or threepence per word. But the experience of the Pacific cable has shown that the first thing to do is to clear away competition ; and the Premier's calculation says nothing of that.