BIG PROBLEM

Evening Post, Volume CXV, Issue 70, 24 March 1933, Page 8

BIG PROBLEM

TRANSPORT CONTROL

WASTE OF COMPETITION

CO-ORDINATION IDEAL

The gazetting of an Order in Council making certain provisions of the Transport Licensing Act, 1931, applicable to the carriage of goods by motor-vehicles, marks a further important step by the Government in implementing a policy of co-ordination of transport services, tho ultimate -aim of which is the reduction of national transport costs. When interviewed today, the Minister of Finance (the Et. Hon. J. G. Coates) said that the question of reducing transport costs was closely wrapped up with the economic welfare of the Dominion. Transport was playing a rapidly increasing part, in the Dominion's economic and social life. Comparing 1913-14 with 1930-31, the expenditure on, land transport had increased from £29 to £45 for each £100 of the national value of production. It was difficult to escape the conclusion that wasteful competition in the form of duplicated and triplicated services was a prime cause of the unduly high costs, which tended to clog the flow of industry and trade. The. Government fully recognised the urgent necessity today for reducing transport costs as one of the steps in the direction of bridging the gap between costs of production and the ruling low receipts from' production. Transport costs were important, regulators of tho direction and velocity of internal trade, and Mr. Coates expressed the view that a reduction would go far in increasing the rapidity of the flow of our internal trado and commerce. TRANSPORT EVOLUTION. The evolution in transport following on the development of the- inotorvehiclo has. been on a -world-wide scale and in .all countries affected the problems arising therefrom have been receiving the attention of Governments. In tho Dominion the changes have taken place in a comparatively short period, as is evidenced by the fact that the number of motor-vehicles of all classes has increased from 123,396 in 1925 to 186,818 today; passenger vehic-les of all classes increasing from 108.655 to 152,90-1, and motor-trucks from' 13,673 to 33,914. Many of these vehicles have come into existence to meet a new demand, .which could not have arisen under tho older forms of transport, and have thus added to the national volume of business, and brought new freights and passengers to the railways and coastal shipping services. Indeed, not_ many years ago, tho motorvehicle was regarded as a most useful complement to the older forms of transport, but recent years have seen it grow from a complementary to a highly competitive factor' in the transport "field. Naturally enough, in tho circumstances, it has attracted tho most valuable freights and passengers from the existing transport facilities, particularly the railways, with the result that the railway finances suowod a deficit of £1,400,000 last year. The financial stability of several harbour boards has also been threatened, and the rates levied on the land adjoining tho harbours has increased from £57,000 in 1926-27 to £100,000 ~in 1930-31. Meantime, the present total annual expenditure on roads is in' the vicinity- of £8,000,000 as compared With a pre-war expenditure of appro-' ximately £3,200,000. CHARGES ON PRIMARY PRODUCTS. In addition to these problems of loss of earning power of much State capital sunk in railways and harbours, and -of financing the roads, there is the very practical problem surrounding railway rates on primary produce. This problem.- is so urgent, and the need for reducing charges s» gr,eat. that the Legislature recently enacted legislation providing for substantial reductions in certain cases at tho expense of the Consolidated Fund. It is hoped that universal reductions on the Railways will be possible in due course as a result of the regulation of motor goods services. The railways have, in the past, been financed on the principle that goods of a high intrinsic value should pay higher charges than those with low intrinsic values (e.g., primary products). If, therefore/as has actually occurred, the railways lose the higher rated commodities on which, they depend for approximately 40 per cent, of their revenue, to the motor-vehicle, it is patent that either the- country must face annually increasing railway deficits, which require to be met from general taxation, or that the charges for the transport of primary products on the railways must be . substantially increased. Each of these alternatives is undesirable at any time, but in. view of the present plight of primary producers either would at the present time be a tragedy. . If the railways, coastal shipping services, and motor-vehicles all filled the separate and distinct sections of the whole transport field for which they each..hold tho economic advantage, from the standpoint of real transport costs, the question of increasing transport costs through leaving two or even three services carrying only one-third of their capacity in competition with each other would not arise. The idea that simply because motor services can take the cream of the business from the railways, leaving only the bulky and unremunerative traffic which is iievertheless of great interest to the welfare of the Dominion, and make good profits, is in the public interest, is a fallacy, if the result is a reduction in transport costs to a few and an increase to the many. - . " , The impression that road, rail, and shipping services are- essentially rival agencies and that no one service will prosper until it has wiped out the other or others, is quite wrong. All three services have definite. advantages in certain areas, or in connection with certain commodities, and the aim of the Government in . the control of motor services is not their annihilation, but an attempt to delimit tho sphere of the three forms of transport, so that future wasteful competition may gradually be eliminated, and each Mnd of transport employed in its area of maximum usefulness. The object is to' secure adequate facilities to meet all reasonable requirements at the least cost. The cost must be ascertained, not on the basis of "cut" rates rendered possible through concealed subsidies, but upon a proper reckoning of the actual cost to the whole country. The difficulty is competition, the solution co-ordination. PASSENGER SERVICES. Mr. Coates said that the Transport Licensing Act, 1931, provided that the provisions relating to passenger services should come into operation, as from March 1, 1932, and that those relating to the control of goods services should be brought into operation at a subsequent date. The passenger services had been dealt with smoothly ■and effectively, as was evidenced by the fact that estimated savings of just under 6,000,000 vehicle miles and £168,000 in operating costs were made during tho first year's operations. This was a remarkable achievement, and he desired, in passing, to pay a tribute, to the work of the men who acted on tho various licensing authorities. Tor a number of reasons, the Keens-

ing of. motor-trucks engaged in the carriage of goods was a much more difficult administrative problem than that involved in dealing with passenger services. This appeared to be the experience in nearly all countries, and the general procedure? has been to deal with the passenger services first, then with the benefit of the experience arising therefrom, to apply the same principles with modifications to tho goods services. The Government now feels that the special transport administrative machinery has proved sufficiently satisfactory, in connection with the passenger business to warrant it being used in the control of gopdi services. •-