CHARGES FOR TELEGRAMS

Hawera Star, Volume LIV, 27 June 1935, Page 6

CHARGES FOR TELEGRAMS

Previous Flat Rate Policy Resulted in Heavy Loss

MINISTER ANSWERS CRITICS SCALE CONSIDERED FAIR ' (By Telegraph—-Press Association.) WELLINGTON, To-day. “Those who advocate the flat rato of charge for telegrams are trying to induce the Department to revert to a policy which it very patiently tried at a great loss, and with most disappointing results,” declared the Hon. Adam Hamilton, Postmaster-General, dn a further statement on the subject of telegraph charges to-day. Incorrect conclusions, said the Minister, were being, published regarding the result of the Department’s departure from the flat system of charging for telegrams. Some critics were quoting the general recovery of business in the Post Office and suggesting that, had the old flat Tate been retained, there would have been a proportionate increase in the number of telegrams sent. “It will interest these prophets to know,” continued the Minister,” that for many years not only in New Zealand, hut also in most other countries, the number -of telegrams handled has been regularly decreasing, yet in New Zealand under the new scheme of charging in line with service this backward tendency has been corrected. There has been an increase during the last two months (under the new scale of charges) of G per cent, in the volume of telegraphic, business and exactly the same percentage .improvement in value. This is a practical indication that the present scheme is a balanced one fairer to the telegraph users, and that, as a whole, they aTe finding it more suitable. Over 35,000 more telegrams were sent last April and May than during the corresponding two months of 1934. HAD LONG TRIAL. “The flat rate system of charging has had a long trial in. New Zealand. In 1923 the flat rate was reduced from Is to 9d and was thus given a much better dance of demonstrating its popularity, but with what Tesult?” asked the Minister “From that time onwards until 1930 the loss on the telegraphic side became progressively worse, the slight stimulation, in business due to the concession falling far behind the decrease in revenue which it caused. Obviously, this experience could not encourage the Department to further experiments, leading possibly to a sixpenny telegram. This would have been as little justified by the hard facts as the selling of ordinary commodities by business men. ia.fr below cost price merely to achieve a spectacular result in the way of increased turnover. So far as their own affairs are concerned, they, of course, endeavour to make their charges correspond with the cost of the service ■ rendered, which is exactly what the department is trying to do in connection with its telegraphic business. “It lias been suggested in parts of the South Island, particularly in Dunedin, that the variable rate for telegraphing seriously handicaps the business community of that part the Dominion by increasing the cost of communicating with North Island towns. Those- who have expressed that view would be wise to take into account the great advantage they enjoy over their -Auckland competitors in communicating with their own customers and clients who live within, the range of telegraphic charges lower than the maximum at 'the other end of the Dominion. One may quote the opinion, of the Auckland Chamber of Commerce, which, after investigating the operation of the present system, expressed the opinion that the Department has done 'the right thing. "Would our southern critics carry their advocacy of flat rate charges to the point of favouring flat rates of freight so that business people in other parts of the Dominion could compete with them on absolutely equal terms? They accept as inevitable and economically sound a variable charge for transport, both on the State Railways and in connection with private motor transport, nor has there been any expressed objection to toll charges for telephone communication strictly in line with distance. LOSS ON THE SERVICE. “Every effort lias been made to improve the financial positions of the Department’s telegraphic business/' continued the Minister. “The most economical and efficient methods of dealing with the traffic have been introduced and the whole system has been under constant scrutiny with the object of keeping down costs, but without success in balancing the accounts. During the last ten years the loss on the telegraph service has amounted to £1,043,GS4. Assuming that the critics of the present telegraphic system are not anxious to obtain benefits at the expense of those who use other postal services, a flat rate would have to bo. imposed fairly representing the allround cost, and this, despite highly efficient operative methods and the use of modern equipment, could not be less than Is 2d for twelve words, regardless of the destination of the message, but under such a system many telegraph users would be unfairly penalised by having to pay a proportion of the cost of service given to others.”