UNFAIR TRADING.

Gisborne Times, Volume LXIX, Issue 10854, 25 March 1929, Page 6

UNFAIR TRADING.

ELECTRIC POWER BOARDS

PISHING OUT PRIVATE ENTER-

PIHSI

(Isy the Nineteen Twenty-Eight

Committee..)

lii common with many other forms of State enterprise, electric power beards have shown a marked tendency to exceed their intended functions. Under the first empowering Art of 1918. these hoards were setup chiefly for the purpose of supp.ying cheap hydro-electric power. No exception can he taken to that proceeding. The complaints of the private trader—complaints both num-i-ious and well founded—are directed against the aim-e by the boards of what may he called their secondary powers and functions. These complaints may be classed under two heads, one being against the exemption of the boards from many forms of taxation to which their private competitors are subject, and the other against the- failure of the board? to observe in their dealings the ordinary practices of trade. Under the first head a majority of the boards, being themselves “local authorities” possessing rating powers, are exempt from land tax, income tax, rates and certain forms of stamp-duty, while under the second head they may make and levy rates' to cover excess of estimated expenditure over income. They have also wide powers of borrowing by way of bank overdraft.

CRAMPING TRADE

The position in regard to the failure of the hoards to observe the ord.nary usages of trade is even more s.-iiou?. It is stated that in specific instances some of the boards, after taking up the selling of electrical appliances and fittings, have specialised in certain lines to the utter exclusion of competing lines, enforcing compliance with their policy by refusing to finance and service any hut the lines approved and sold by themselves, and that they sell such appliances at ridiculously low prices, losses being recouped by increasing both the price of curreni to consumers and the. rates imposed on consumers and non-consumers alike. In this policy the boards arc greatly assisted by the total absence of competition in regard to sources of electro power, and thus are enabled to raise prices almost with impunity. The result has been that even boards which have carried out only their legitimate function of supplying power Irn o built up great reserve funds, a practice- which - should be carefully watched in flic public interests.

THE .MONOPOLY SCOT*KGJ

•Again, it must be borne in mind that the private businesses which were already well established before the constitution of the hoards, and wriieli are being more or less quickly lni'cid out of business by the unfair methods of some of these bodies, have no form of redress lor the very large loss of capital they will ultimately have to Idee. It would seem only fair and reasonable that some method of compulsory purchase of private works by the boards should lie made available to private traders. It also should be remembered that at the inception of the board system, there were in existence large private concerns l'ullv capable of setting up branches in scattered areas tor the supply of apparatus, had they Ii eon given the opportunity to do so.

EXCLUSIVE PEIYfLEGES

Utlier unfair advantages enjoyed bv the trading boards are that they can compel payment of accounts by threatening to cut ofF tho supply of current-and that they are fully secured for apparatus sold on the time payment system, further, if their own creditors are kept waiting the boards are apparently under no liability to pay interest on overdue accounts. It is stated that in some instances this exemption has had the effect of compelling private traders to pay interest on bank overdrafts while Waiting long periods to receive payments from tho hoards. Even admitting, then, that in the past there lias boon a tendency on the rart of some few traders .to exploit the public and also that in the event of reversion to private trading certain advances in the direct cost- to the consumer might he necessary owing to the present unsound policy of tho* boards, it is quite plain that the private traders have a good case calling for full and earlv investigation.