COAL FREIGHTS

New Zealand Times, Volume LII, Issue 12181, 4 July 1925, Page 5

COAL FREIGHTS

Y IMPORTANT CONFERENCE ON NEW RAILWAY TARIFF

IS THERE TOO MUCH HANDLING? ALLEGED SERIOUS EFFECT ON LOCAL INDUSTRY The ball has commenced to roll in earnest upon the subject of the proposed new railway tariff, and the general impression that in many c&ses the rates were being raised unduly crystal* lised yesterday, when the first important deputation watted upon the Railway Board with regard to the long distance freights as affecting North Island mines at Taupiri, Pukemiro and Waikato. There was some wordy .warfare as to the immense injury which would accrue to the New Zealand mining industry and the fillip which would be given to the imported coal industry if th-> new charges were insisted upon.

A remarkable fact was that both aides looked at their own case fro))' the same point of view, yet the two cases differed. The increased Tates objected to are on the long distance freights of coal. The short distance freights are profitable, the long ones 're not. The mine owners wanted the whole coal freightage lumped together to ascertain if there was a lose on coal freightage as a whole. The Railway Board also desired to take the whole freightage, not the .whole coal freightage, but every kind of freightage carried on the railways, and there was a good deal of discussion before tboth sides aDpeared to grasp this distinction. Then came a pointed question from the mine owners, who wanted to know how much increased revenue the board expected to get from the increased charges over the long distances. The chairman of the board, Mr F. J. Jones, was inclined to regard this as a little “inside” information, which the mine owners had no right to expect, and countered for the moment by asking if the mine owners would supply similar figures regarding th< working of the mines. The Hon. E. W. Alison replied that If the mine owners had an approximate idea of the sum the department required to put these particular freights, the owners might then be able to put forward a suggestion which would help the department to deal with it. To this the chairman of tho board replied that approximately the department anticipated an additional icvenue of £50,000. The mines represented were Taupiri, Hon. E. W. Alison: Waikato, Mr R. White: Pukemiro, Mr E. Wright; Waipa Railway Collieries, Mr H. D, Vickery and Mr Norrie Bell; the Railway Board by Mr F. J. Jones (chairman), Mr A. W. Mouat and Mr H. H. Stirling. FREIGHTS WILL BE LOST Tho Hon. E. W. Alison said the companies supplied lignite onal for . household and steam purposes, and Waikato coal was passed over screens and delivered in three classes, household, steam, and slack. Household coal comprised 20 per cent, and steam and slack 40 per cent. each. Slack was two-fifths of tho whole output, yet it was sold at the mine at 7s per ton, which was considerably below the cost of production. Four collieries have £431,000 invested in those undertakings, and employ 900 men. In\ the last, twelve months they disposed of 490,000 tons, of which 154,000 tons went south of Taumaranui, and would have been affected by the new scale. Of that 60,000 tons were slack, which wae sold at 7s per ton at the mine, but the new tariff would amount to four times the cost of the coal to the consumer. The slack was supplied to dairy companies and freezing companies. and the price in the past had enabled them to deliver their output to advantage. Under the new tariff that trade would be lost as Newcastle coal could then be more advantageously delivered. <so that the railways would lose that Freightage, as the Newcastle coal was seaborne, and then delivered in lorries. The result wo.lild be not increased revenue to the railways, but a net reduction of traffic revenue cf £37,800.

The speaker urged that every endeavour should be made to encourage local industries, not to suppress them. As the railways are run for the benefit ot the State the department should sot impose heavy charges which would injure the industry and encourage the importation of coal, a step which was economically unsound. Reference was made to evidence given at the Coal Commission, and Mr Alison raid if the commission did not report in favour of local coal being used on the railways it would be a great surprise to him. It was used for 22 years, and Waikato coal was latisfactory. The quantity of coal imported in eleven months of 1924 was 632,513 tons. value £720,402, against 592.446 tons, value £477,329, in 1923. When freight and exchange were added it meant that 1( millions of money went out of the country for a commodity which could well have been produced in the country. If the mine-owners were unable to dispose of the slack it would reduce profits, less profits would reduce taxation payable to the State, less output would reduce the number of workers, and it would affect the dairying and freezing industries, which would have to pay more for imported coal. Mr R. Whito instanced that the slack for the Waitara Freezing Works, costing 7s at the mine, had paid 17s 2d per ton mileage, which, under the new scale, would be increased to 28s 4d. Mr Vickery pointed out that coal was not the only class of goods carried at low or differential rates as a matter of national policy. The Hon. Mr Alison, speaking of pro.

'ts, said his company had only paid A per cent, on capital for years, making no allowance for depreciation by ,ho exhaustion of coal. Replying to questions, the chairman said the railways aimed at paying 4£ per cent, on the capital, but bad paid jJ per cent. This brought a volley of questions from the mine-owners. If coal had been carried on at a loss—there were other things such as manure which had been carried free—and the railways had paid 5} per cent., why were the charges being raised on long-dis-tance coal freights. The deputation pressed for the whole of the coal freights to he taken into consideration to ascertain if there was a loss on the whole. The chairman’s reply was that the board wished to take the freights as a whole, but coal was only a portion of the freight. The hoard was charged with placing the railways on a commercial basis, and traffic had got to pay for itself. The new scale would only just pay the 1 cost of freightage without allowing for the return of the ampty wagons. Wbat the hoard was coking was, after 76 miles, .7 of a penny per ton per mile. The Hon. Mr Alison: Seeing that -he coal business of the railways is equal to 27 per cent, of your traffic, you are doing an enormous business. If you are making a loss on the coal, h'«w is it vou are able to show 5$ per cent, profit on the business of the railways in the North Island P We should be glad to know how you cam it. The chairman: We don’t make it oat of coal. Mr Stirling: It looks as if someone else is paying too much. Mr Wright pointed out that, in spite of 5£ per cent, profit, the rates were being increased on coal. AVhat freights would be reduced? Mr Stirling: That is no reason why we should carry coal at a loss. COST TO WELLINGTON PEOPLE A little discussion then ensued as to the coot of coal in Wellington. The chairman said the price to the consumer was 70s to 78s. The railway freight was 18s, which left about £2 12s for the mining and distribution. The Hon. Mr Alison: We can’t control that. Mr R. White said the household coal cost 31s at the mine, freight was 18s, making 495, and the cost of hanking and logging brought it to 555. In addition, there was the loss of coal in transit, which would be equal to five or six cwt per truck. Take the retail price at 78s, upon which there was a disco'unt, and there was a difference of 235, or Is lid per bag, which was not extravagant, seeing the hills and steps and inaccessible places in which it had to be delivered.. Then credit was given, and the dealer had to get hit living. Yet it was proposed to increase the freight by £4 on an eightton truck.

The chairman replied that when the losses were made on the railways they were paid out of the Consolidated Fund, and now they were to he asked to pay tho cost of the freightage. It was only paying direct for the service. They had to pay one way or the other. The Hon. Mr Alison then put several question as to what revenue tha board expected from the increased long-distanoe tariff. The chairman: We are not hero on our trial with Mr Alison as the prosecuting counsel. The Hon. Mr Alison: I am not pro. secuting counsel, but we ask you, ax tho Railway Board, to reconsider arate which will ruin an industry of this country. After a lot of further discussion, the chairman gave the figure as approximately £50,000. The Hon. Mr AHeon thanked the chairman for the information, and thought perhaps the mine-owners would be able to put forward a suggestion to meet the case. If the new tariff was brought into operation, the Railway Department would not retain the whole of the coal freights nor increase them, as the mines would not he able to dispose of the slack. There would be a big decrease in the revenue, because tho coal woutd not he carried. The deputation had no hostile feeling towaids the hoard. It was pointed out that for six years no dividends were paid on the capital in the Pukemiro mine. The chairman: How many years did the railways go without paying a dividend? After some further discussion, Mr Alison suggested that now they liad something to work upon they might be able to arrive at an adjustment, but the Press should retire. The other members of the deputation and the board concurred, and the Press then withdrew.