The Evening Star MONDAY, JULY 27, 1925. THE RAILWAY TARIFF.

Evening Star, Issue 19003, 27 July 1925, Page 6

The Evening Star MONDAY, JULY 27, 1925. THE RAILWAY TARIFF.

JToWAEDa the end of 1923 the Minister of Railways indicated that a comprehensive revision of_ the railway tariff was to bo undertaken. In tho Railways Statement a year later Mr Coates gave an explanation for the delay, and indicated the tariff’s probable features. Ho admitted that the general expectation Jay along the line of a reduction 'in charges, and in a rather vague way ho seemed to encourage such expectation. “It is believed,” he stated, “ that such reductions may be made in the railway rates as may eventually bring such a volume of increased traffic as to countexbalance the loss involved in tho rate reductions.” That is the long-sighted view. But ho also considered tho immediate future only. “It may be, of course, that some reductions may bo made which, by bringing traffic to the railway, might to a greater or lessor extent recoup the loss involved in tho reduction of the rates; but it seems safe, at the outset at least, to assume that reduction in rates will involve at the commencement and for some little time afterwards a direct loss of revenue.” The appearance of the tariff a little while ago proved that,tho short view had prevailed. Goods are tho main item of revenue to the railways, and in many cases, instead of there being reductions in goods freights, there have. been increases. It has caused some surprise and disappointment, because in the 1924 Railways -Statement Mr Coates said: “During the war and post-war periods the ""• santrnr obartroq yverfi" increased ,by.

only 25 per cent., as compared with 40 per cent, in the case of goods, and, apart from considerations of competition, it docs not appear that there is the same pressing necessity for reductions of a general nature in the case of the passenger fares as in the case of I goods rates.” The protests that are at present being heard from various sections of trade against increases of freight on lines they are concerned in cannot, therefore, bo attributed merely to a desire to get concessions that they are clearly not entitled to. To enumerate a few only of the interests, the colliery owners, the wheat growers, and the sawmillers have protested. The dairy producers also intend .making their voice heard. The new tariff proposes no change in the freights on butter and cheese. The complaint is that it does not make a hoped-for and half-promised reduction. For many years dairy produce was classified at one and a-half Aimes the E rate (then standing at its 8d), and was accordingly charged 14s 6d per ton per 100 miles. During the war dairy produce was reclassified under the D rate, and the charge thus became 20s 6d. In August, 1920, the 40 per cent, all-round rise in freights brought the cost of transporting dairy produce to* 37s Id per ton per 100 miles. It has stood ever since at that figure, and according to the new tariff is still to stand at it. Possibly prior to the first of the increases, which now amount to over 150 per cent., dairy produce was carried too cheap; but it can hardly bo denied that it is penalised now, particularly as the volume of this transport has enormously increased in the meantime. The only exceptions to this rate are whore road competition is a factor, as, for instance, the reduced charges made between Pukerau and Bluff. As to other branches of production, a 20 ; per cent, increase is proposed on wheat and a 25 per cent, increase on frozen meat. The Canterbury Chamber of Commerce, in its report after examination of the now tariff, regards these in- | creases as unfortunate. It expects that the movement to institute severe competition with the railways by tho motor transport of grain will receive a great stimulus, and it predicts that many of the inland freezing works will have to close down, as the increased cost of transport to tho ports will absorb the entire profits of these farmers’ freezing companies. That would moan the loss of that traffic to the railways, only partially made up by tho substitution of tho loss remunerative traffic in live stock. Under these circumstances it objects to the continuance of the policy of subsidising agriculture and fruitgrowing and local road boards by carrying lime (for fertilising) free up to 100 1 miles, and charging nominal rates for I wood for fruit cases and road metal. It is obvious that the continuance of those concessions involves other goods having to boar unreasonably heavy charges, so that tho railway accounts may come out square on the new basis. As to that new basis the Canterbury Chamber has a not entirely novel contention to offer. Its report states: “ In connection with tho question of making tho railways pay an important question arises ns to tho amount of capital upon which interest (which is to ho raised from tho nominal rate of 3J per cent, to 4} per cent.) should be charged. It is true that a capital sum of £41,399,000 has been expended upon opened lines of railway to 1924, but is the present earning power of tho system fairly and properly to bo charged with interest on the whole of it? In a privately-owned concern would not some of this amount have been written off long ago as lost and uselessly expended capital? In these days of keen competition no concern can be expected to earn interest on capital which is lost and dead. Wo are not prepared to state what proportion of tho Public Debt, which forms the capital of our Now Zealand Railways, can now legitimately be regarded as productive. Some of it lias been expended upon lines which have never paid, nor oven made an adequate contribution as feeders to the main lines. We particularly refer to this matter in view of the further commitments of the Government to the railways, to bo spread over the next eight or ten years, of a capital expenditure of no less than twentyeight million pounds. Meantime, however, we must assume that the railways as a going concern are worth the £41,000,000 which has been spent upon them ” (£48,739,000, including lines not yet open for traffic). There is on the whole some justification for believing that the railway authorities have ignored the Fay-Raven Commission’s recommendation for proper payments for the conveyance of lime and road metal as well as for branch line losses to be made good out of the Consolidated Fund.