IRON AND ELECTRICITY

New Zealand Herald, Volume LXXV, Issue 22984, 11 March 1938, Page 8

IRON AND ELECTRICITY

When Mr. Coates remarked, in disoussing the Iron and Steel Industry Bill yesterday, that while past Governments had talked of developing this industry themselves they had not done it, though there was ample opportunity to socialise it, he drew the interjection "You socialised electricity." Mr. Coates countered with "There is no comparison. One is a service and the other is a commodity which has to meet competitive prices." It was an effective retort, but did not cover the whole of the differences and resemblances between the two things. A single sentence could not be expected to do that. Actually, while hardly itself a commodity, electric power is competitive with at least two definite commodities, coal, with its by-products, and oil. However, there are other reasons why the example of electricity is not a good parallel to that of iron and steel. The supply of current is naturally adapted to being made a monopoly, either generally or in defined areas. Before the* Government entered the field there were no competitive current supplies anywhere. Whatever the source of power, it had a monopoly in its own territory, just as gas supplies, whether privately or municipally owned, are given monopoly privileges in their own areas. Once power development came to be organised on a national scale, it was made almost wholly a State monopoly, though it is not entirely that yet. The fallacy of quoting electricity in the attempt to justify the Government's iron and steel policy is that, though there may be services and even supplies which are by nature adapted to becoming State monopolies, their existence and successful administration in that form is no justification for multiplying monopolies or socialising industries indiscriminately. Incidentally, electricity supply by the State promised from the first to be economically sound, and has rapidly fulfilled the promise.