RAILWAY COMPETITION.

New Zealand Herald, Volume LXV, Issue 19957, 28 May 1928, Page 12

RAILWAY COMPETITION.

Sir,—The question is whether the Railway Department has any right to make special rates—to the point entailing loss on the business done—with the sole object of securing the business from the Northern Steamship Company, or any other transport company. Mr. E. Casey, on behalf of the department, argues thus: "That the minimum rate which the Northern Steamship Company can afford to charge for any particular traffic is one for that company to decide . . . and, by parity of reasoning, he thinks the public will be quick to decide that the same applies in the case of the Railway Department." He further says, "The position is very elementary. It resolves itself into the question whether the Railway Department is to have the traffic or not, at such prices as it decides are a minimum at which it. feels itself justified in handling the traffic." But there is no "parity of reasoning" in such a case at all. In the one case, the Northern Company, in fixing its minimum, cannot afford to go below the minimum cost, as that would entail a loss on all the business done at such rate, whereas the Railway Department can afford to ignore that very important factor, and proceeds to fix a price "at which it feels justified in handling the traffic," whether that results in loss or not, so long as it succeeds in "securing the traffic" from the Northern or any other transport company! This "special rate" fixing is a dangerous power to place in any hands at any time. It is infinitely worse when it is exercised by a concern which can hand over the resultant loss for someone else to pay. I sim confident the public would not support this policy of excessive rate-cutting for the sole object of taking away business from other concerns. and it. will require some more cogent reason than has so far been supplied by Mr, Casey to convince it of the justice of the department's action. I think the public,will agree that Mr. Rhodes states the case fairly when he says: "The Northern Company has no objection whatever to competition, but tariff cutting at obviously unpayable rates is an injury, not only to the company, but to taxpayers, who must bear the loss." 23L Parnell Road. J. Thornbs,