"CUT ONE, CUT ALL"

Evening Post, Volume CXI, Issue 151, 29 June 1931, Page 11

"CUT ONE, CUT ALL"

BUT NOT 'BAIL-WAYS

RAIL TARIFFS IRREDUCIBLE

AUSTRALIA'S PROBLEM

Since tho pruning knife in Australia passed from tho wages of labour to the wages of loaned-capital (interest), there has been an obvious concern on the part of many people to see that the cut goes round evenly. If the principle of "cut labour, cut capital," is good, then is not the principal of even cuts equally good1?

Mathematical equality- is, however, hard to attain. In any case, it will take weeks and probably months before the various Parliaments can implement all the decisions of the Premiers' Conference, or even those affecting wagesalary payments and interest alone.

It was natural that tho Premiers' Conference developments should give a new stimulus in Australia to tho analysis of all costs (including rent, transport, rates, taxes), and all profits (where there are any). There are many people who think that rent ia still squeezeablci. And some hold the same opinion with regard to railway freights and fares.

To these latter the chairman of tho Victorian Railway Commissioners (Mr, H. W. Clapp) on 17th June returned adecided no. He told a number of progressive associations that economic progress would gain no sustenance by picking at the skeleton of railway'finance, and that concessions to railway users involving, reduction of railway revenue were impossible. "CUT" SUBUBBANITES SEEK "OUT" FARES. The first speaker for the progressive associations said that practically every citizen of Melbourne had suffered a reduction of income, and the fact that railway fares and freights remained the same did not help the citizen to accept that reduction. He advocated a reduction in the interest bill of • the railways by a writing-off or transfer of capital, enabling suburban fares to be reduced.

Another speaker asked how it "was possible for a. man who had suffered reductions to continue to pay the railway fares assessed in times of plenty. High fares, he said, had driven many people from the outer to the inner suburbs, such as Bichmond.

Other speakers urged the need for a reduction of fares on outer suburban lines. ■■•■■■ ■. . ,

Mr. Clapp said that the railways were doing everything that they could to help progress. But the railways were State-owned, and people who talked to him as chairman of the Commissioners were talking to themselves. The Commissioners had been endeavouring to operate the railways at cost as trustees for the people. The railways user.for many years had been receiving the service at very much under cost, as was shown by the deficits. A voice: "It cannot go on." Mr. Clapp: "No, sir, you said a mouthful w,heit you said that." The revenue this year, Mr. Clapp continued, would be £3,000,000 less than last year. Every possible economy had been made, but the. fixed, charges of the railways went on. EXCHANGE-LOSS v. SAVED INTBBBST, The Commissioners were trying to make economies honestly, decently^ and humanly, and ho one was getting too much sleepl They hoped for some relief in the loan conversion, but they feared that it would be swallowed up by the exchange on interest payments abroad. Depreciation on the railways had never been fully met. There was a shortage of. £300,000 a year. He had estimated the loss in value when he was called before the Royal Commission in 1927 as £16,000,000, and to-day it was more, "The reduction of freightsand fares that you ask for," Mr. Clapp went on, "is'absolutely impracticable at present. On this year's revenue alO per cent, loss.would mean £1,000,000 less revenue, To offset thati we should have to have an increase of 11 per cent, in traffic, which I cannot see available. Motorusers would not be tempted away. I know that because I have taken an acute interest in motor competition. There is no hope of competing with motor traffic as it is at present run. You build your roads, give them to the motorist, and kiss them goodbye. He does not pay for one-quarter of the wear and tear on the roads, but we are expected to pay for and to maintain the, property we operate upon. Deficits cannot be written off. They have to be paid by all of us. There are 155,000 taxpayers to pay, and their share in this year's deficit will amount to about £10.si head. There has been a tremendous decline in traffic, owing to unemployment, which has been caused largely by the fall in the prices of primary products.' A great deal has been said about congestion. Yet there are more than 500 houses vacant in Bichmond. People move in because of lower rentals, cheaper prices, and greater marketing, facilities." ROAD-FKEIGHTS KNOW NO BOTTOM. Dealing with freight competition, Mr. Clapp said that the railways had been charging 62s lOd a ton freight upon a commodity about 170 miles from Melbourne. Motors were carrying it for 555. Then he had done a foolish thing; he reduced the railway freight to 29s 5d to test tho 'truck owner. The truck owner then reduced his freight to 29s 5d also, delivering from warehouse to warehouse. The road man could not afford to carry it at that price. He could not go on. When his trucks ran out he would bo finished. But another competitor would arise next day. Every ton of freight which wont on the road vr;{s paid for on the railway as well as on the road. If the railways were relieved of the burden of wasted assets, tho relief in the interest bill would be about £750,000. The deficit was greater than that. Without even providing sufficiently for depreciation, the railways would still be £750,000 short. The Commissioners would make reductions as soon as reductions were possible, and the first people who would benefit would be the primary producers. It was evident that the Government could not carry tho load. . A voice: ''What about good old posterity?" v Mr. Clapp: "We seem to be posterity." (Laughter.)