LATE RATE TELEGRAMS

Northern Advocate, 27 June 1935, Page 2

LATE RATE TELEGRAMS

STATEMENT BY MINISTER. REPLY TO CRITICISM. "TRIED AT GREAT LOSS.” I Special to *'l\'isrtheTii Advocate .”l WELLINGTON. This Day. “Those who advocate the flat rate charge for telegrams are trying to induce the department to revert to a policy which it very patiently tried at great less, and with most disappointing results,” declared the Hon. Adam Hamilton. Postmaster General, in a further statement on the subject of telegraph charges today. These 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 rate been retained, there would have been a proportionate increase in the number of telegrams sent. Telegrams Decrease. “It will interest these prophets to know,” continued the, Minister, “that for many years, not only in New Zealand, but in most other countries, the number of telegrams handled has been recently decreased, yet in New Zealand, under the new scheme of charging in line with service, this backwards tendency has been corrected. There has been an increase during the last two months (under the new scale of charges), of 6 per cent in the volume of telegraphic business, and exactly the same percentage of 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 are finding it more suitable. A Long Trial. “Over 35,000 more telegrams were sent last April and May than during the corresponding two months of 1934. 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 chance of demonstrating its popularity, but with what result? From that time onwards, un|il 1930, the loss on the telegraphic side became progressively; worse than 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 at below cost price merely to achieve a ■ spectacular result in the wajf of increased turnover. Endeavours of Department,-

“So far as their own affairs are concerned, the business men, of course, endeavour to make their charges correspond with the cost of service rendered, which is exactly what the department is trying to do in connection with its telegraphic business.

“It has been suggested in parts of the "South Island, r particularly in Dunedin, that the variable rate for telegraphing seriously handicaps the business community of that part of the Dominion by increasing the cost of communicating with North Island town. 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 so, 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. “Every Effort Made.”

“Every effort lias been made to improve the financial position of the Department’s telegraphic, business. 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 £1,043,684. 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 be. imposed fairly, representing the all-round 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.”