TRADING BY STATE.

New Zealand Herald, Volume LXVI, Issue 20387, 16 October 1929, Page 11

TRADING BY STATE.

ATTACK ON PRIVILEGES,

BUSINESS MEN'S MOVE.

STRENGTHENING ORGANISATION

•Renewed opposition to State and local body trading under statutory privilege was expressed by the Chambers of Commerce Conference yesterday. The conference not only adopted a series of remits on the subject, but also discussed ways and means of strengthening tho central organisation of the Associated Chambers to deal more effectively with this matter and with others of importanco to tho mercantile community.

A full discussion took placo in committee upon questions of organisation raised in tho report of a special committco set up on tho preceding day to consider remits from Dunedin and Auckland respectively, suggesting that a full-time general secretary should bo engaged, and that a special paid officer should bo appointed to scrutiniso all Parliamentary bills and now Orders-in-Council.

Tho report recommended that with tho object of giving tho views of chambers of commerce more weight in official quarters and with tho general public, the headquarters machinery of tho Associated Chambers should bo strengthened and enlarged as soon as tho necessary finance was available.

A Fighting Fund.

The committee proposed that when funds were assured the executive should have power to act. It considered that individual chambers would readily procure tho moneys required from their own funds, from their individual members, and from subscriptions and donations by outside individuals and trade and professional organisations. Such contributions should be allocated to a special purposes fund, and not merged in tho ordinary funds of the association.

Regarding the work of the enlarged organisation, tho committee said:— " Successive conferences have endorsed tho need of adequate resistance to the incursions of State and local government into businoss fields on inequitable trading conditions. Invaluable work has been done by other organisations working side by side with the chamber of commerce movement in non-party activities for protecting the interests of trade and commerce along general lines. Tho committee considers that this field oilers unlimited scope for effective action and that the association could and should now extend its operations along these lines." The report was adopted with an amendment requiring the approval of contributing chambers to be secured before action was taken.

The Royal Prerogative.

At the morning session the conference listened to a paper by Mr. R. L, Ziman, barrister, of Auckland, upon the constitutional and legal aspects of the uso of the Royal prerogative in State trading. Tho paper was a shorter version of one read before the Auckland chamber by Mr. Ziman some months ago. The speaker considered that all State trading should bo carried on only by special corporations with a minimum of special privileges. Mr. A. F. Wright (Canterbury), in moving a vote of thanks to Mr. Ziman, said that when tho Royal prerogative was invoked to produce a profit for a State trading venture, or to prevent a loss, at the expense of other liege subjects of tho Crown, an abuse of the principles of government was created.

The following remits were then consid ered:—

" That Uiis conference would earnestly urge the Government to redress the existing public grievance of State competition with private enterprise upon unfairly preferential conditions—and would respectfully suggest as a measure of partial relief that all such State enterprises should be organised and conducted as trade corporations upon tho usual linos —somewhat after tho maimer adopted in tho case of the Commonwealth Bank of Australia, and the Canadian Government Merchant Marine, Limited." (Auckland). " That the Government bo urged to appoint a commission to report to Parliament on:—(1) Existing undesirable infringements of privato rights, and (2) recommendations to rectify same." (Stratford). " That in order to place the railway and other State trading departments on a true commercial basis it is, in tho opinion of this conference, desirable that they should bo entirely freed from political control." (Auckland). "That this conference protests against Government trading ventures being accorded tho protection of the Crown Suits Act and considers that where the Crown is a litigant in respect of trading ventures it should bo bound by tho same rules and laws as operate between subject and subject." (Canterbury.) Freedom from Political Control. Sir. H. T. Merritt (Auckland) said that in his spcoch on tho previous day the Minister of Industries and Commerce, tho Hon. J. G. Cobbe, had said that "fairtrading by the State" should bo the aim of his activities. Mr. Merritt considered that if tho chambors of commerco took tho matter up there ought to be some prospect of legislative action by the Government next session.

Tho right principle was that State trading departments should be entirely free from political control. On this point tho speaker quoted passages from the recent annual report of tho general manager of railways, Mr. H. 11. Sterling, advocating tho commercialisation of railwcy policy as .1 corollary of commercialised management. In principle the commercialisation of tho department should extend to the control of' expenditure, of prices, and of the staff. With regard to expenditure, the privileges conferred on the Minister of Railways had regularly been used for political ends. In the last Budget the Minister of Finance had written of! £8,000,000 as losses, and had proposed an additional £10,000.000 of capital expenditure. The country might well ask how much of this lattor expenditure had been approved by tho railways management, and how much was regarded by tho management as uneconomical and uncommercial. If the railways were to pay they must bo divorced from political control; if they were allowed to remain _ under it, the country must accept tho situation.

The Public Pays.

Mr. D. Seymour (Hamilton) said that at present competitors with the Stato wore called upon to guarantee! tho stability of tho State departments which were their business rivals. Tho Public Trust Office loaned out at tho market rato moneys on which it paid only its own lower : 'common fund" rato. Tho difference represented a charge for tho Stato guarantee of security. Between tho years 1909 and 1922 this charge in tho aggregate had been slightlv over £1,000,000 a year. Sinco 1922 tho figures had been "blocked," but ifc was safo to say that tho public was being called upon to pay £2,000,000 ft year for the State guarantee. Mr. W. Machin (Canterbury) said that tho first thing to docido was, what were the functions of the . State; tho second was, what limitations were to bo placed on tho State's operations. Public servants were able and energetic men, and cherished a very human desire to extend tho operations of their departments. Tho enorgy and enterprise which had made the Dominion what it was in the trading field were now in jeopardy as the result of interference by the State and local bodies. He thought that tho executive of tho Associated Chambers should be asked to consider tho whole question and bring down precise recommendations on both tho points lie had raised. Tho remits were approved.: