STATE COAL MINES.

Lyttelton Times, Volume CXVII, Issue 17289, 3 October 1916, Page 11

STATE COAL MINES.

TO THE EDITOB. Sir, —I read with interest your comment on my letter in your issue of September 29. I would like to say that I do not oppose State coal mines or any other State enterprise, but I do very strongly oppose tbo policy followed in the case of the State mines of not charging the enterprise with many expenses which its competitors have to pay into the revenue of the Dominion. That my information was incomplete I admitted in my first letter; but my arithmetic is not proved faulty by your mere assertion that it is so. My purpose was to show that very' heavy losses had been incurred by tho State mines in spite of the fact that it is relieved of many charges borne by its competitors, and your shy. admission that losses may have been incurred is so far satisfactory. Your original method of showing that the loss had amounted to about ono penny and one farthing per head of population in two years was not a candid way of putting it. I think you should go right back to tho inception of tho enterprise and tell us what the loss of capital and revenue has been in hard cash (also stating it “per head of population” if you want to make it look small). Development work has nothing to do with tho losses, because expenditure on such works was charged against capital, and quite legitimately. so. Possibly the policy of “capitalising” expenditure on development may have been too rigidly adhered to. You assort, again, without any proof, that the State mines have steadied prices. Tho known facts do not lend colour to this assertion. Did prices (retail and wholesale) coino down one penny when tho State mine started, and lias the State mine not been compelled to keep pace with any increases which have been made since? To say that prices would have risen more in tho absence of State competition is sheer guesswork. That tho prices wero not high nor profits exorbitant is, as I said, proved bv the fact that few coal companies had or have reached the dividend paying stage. And I did not state, as you seoin to infer, that private enterprise was more capable than State enterprise. I am glad of your correction to the effect that interest ori capital is provided for; that is satisfactory, even though tho Railway Department has to provide a big proportion of such interest. Retail dealers themselves admit that they are unable to make a decent living, owing to what thej\call the “ ull ~ fair competition “ of the State depots. (See tho report of a deputation which waited on the Hon G. A\ • Russell on September 15.) This scorns to lend colour to your assertion, but I would only call youi attention to the Minister’s reply that “if the method by which the State carried on its operations /destroyed the business of men hnrt their capit/il in the business and, who had worked all their lives in it, some change should be made.” Remcpiber, he was speaking to retailers. When' -fixing prices, retail dealers would, I imagine, be chieftv concerned with the wholesale price" they had to pay the. Now Zealand collieries and Australian coal nnnorters, and as many of tho lattor iiro also retailers, the dealers uo not havo all their own way in fixing prices, whilo the antagonism and competition between tbo New Zealand collieries and the Australian coal importers has up tp now bepn a real satcmiard against' undue inflation of prices, retail and wholesale, for Ned" Zealand or Australian coal. The benefit which tho householder reaps by paying a lower retail price for State coal than lie does tor private brands is more apparent than real. The fact is that State coal as mined contains less heat units per pound than other West Coast and Australian corns, re that tho householder pays less money and obtains less beating value; his ultimate gain is imaginaiy. 1 do not propose to say much more about tho value of the State mines to tho railways and other Government Departments. It does not affect the main question, anyhow: the knowledge that there was plenty of coal in the State mines was no doubt very conrelmg to the railway officials during tho ID4 s trike Without fear of contradiction I say that if the Railway Department thinks the private companies are exploiting it in the matter of coal prices, the “big stick" they wi 1 use , to got reasonable prices will not bo State coal, but Australian coal. In conclusion, if the State mine can, bv c-’Pabte and economical managerevenue the same charges as tho private companies have to meet , sol coal of equal heating value at less puce, than the private companies, let them service .to ft. Christchurch, September 30.