STATE INTERFERENCE AND GAS.

Otago Daily Times, Issue 3252, 9 July 1872, Page 3

STATE INTERFERENCE AND GAS.

TO THE EDITOR,

Snt—l regret that you, confessedly seeing the evil that is likely to result from the meddlesomeness of the State in the Colonies, should, by your article, defend the interference of the City Council with the supply of gas. The number who believe in the doctrine of la'uiaez fftlre, with certain defined modifications, is at present bo am a] I tHot iuT attack on them from a Journal like youm >o apt to make them think that it is impossible to stem the putting into practice of the instructions given to Hans Breitman, viz.:— Aud c!e segondt crate Moral Hit dat into him ye

rings Va» dat Government for efery roan tnoost allays do eferjr tfaingi.

On two grounds you say the action of the City Council can he defended. The first is, that the Council has granted certain privileges to a monopolist; the second, that it was induced by a contract to withdraw from a damaging competition with Mr Hankey. It seems to me that the second ground is no ground at all, for, except it waa the duty of the Corporation to interfere with the supplying of gas to the citizens—to step between them and a seller of this commodity, by threats of erecting new gas works, etc,— clearly demanding a quid pro quo for not entering on the competition, is wholly unjustifiable. The whole question really rests on the first ground ; for if the threats were not lawful—l mean from a political economy point of view—the rewards of the illegality should not be reaped. Your first ground is, then, the only one that requires discussion. To interfere with a monopoly— qua monopoly—l do not understand you to contend to be a duty of the State. If it were the duty of the State to run a tilt against any monopoly that might exist, the State would have to assume functions not yet dreamed of by the most ardent believer in paternal Government. There was a time, for example, when there was only one bank here ; wiis it the duty of the State to start a rival ? An undertaker, I believe, was once in Dunedin without a competitor; was it the duty of the State to limit him to prices or threaten him with a rival establishment ? At times the grain market, on other occasions the supply of coal, has Wen monopolised by a few, but none ventured to hint that the Government should fix the price of wheat, or control the selling of coal. Nor are monopolies non-existent amongst üb. There is only one tweed factory as yet, and though competition with English factories has to be met, still the Taieri " monopolist" might charge 30s per yard for his tweeds. Indeed, if interference with the monopoly as a monopoly was justifiable, no native industry could be started, except uuder dread of State control, unless in pairs. I apprehend, however, that it is solely on the ground of certain privileges having been conceded by the City Council to the Gas Company, that you defend the interference of the former. lam not aware of any, except the pertnißsion to lay pipes in the streets. This is all that the Gas Company lias obtained. I confess that the City Council, as trustees for the people, have the property of the streets vested in them ; but the streets aro no private property. They are to be held for the benefit of the public. Tin's is why a coal merchant can convey his coal on his cart along the streets, without entering into .any contract with the city to supply his coal at a certain rate per ton. A Hour merchant may monopolise the market for a time— compel ua to pay £30 per ton for his floar—■* yet who imagined that because he had the "privilege" of conveying his flour to his customers through the streets, that the City Council should demand him to fix a price, or else threaten to start in the flour business? Merely conveying gas through the streets would not, I think you will admit, be any ground for justifying interference by the City Council. You may reply—But the pipes are permanently under the streets. I confess it; but what then ? They do not interfere with the traffic which usually has its outlet through the streets. Occasionally the streets may have to be meddled with ; but then the Gas Company is supposed to leave the street so interfered with as it; found it. Jf it does this I do not see any great privilege it has. It may be that a pipe two fact under ground in a public thoroughfare is injurious to the thoroughfare, but 1 am ignorant of that being the case. Granting, however, that this is a privilege, what ought the City Council to ask for it ? Should it fix the return a capitalist should get for hi* capital employed in erecting and maintaining gas works 1 Surely that cannot be contended. As well force the New Zealand Distillery to sell its whisky at a rate per gallon, because water is taken to it in pipes

laid through certain streets. If it is a privilege, let it be sold, the same as a Corporation reserve To eater into the gas business is still indefensible.

The analogy that you would seek to show between railways, ferries, bridges, etc., dot's not exist. A railway company in England ia allowed tn take anyone's land by paying compensation, and it is true that a maximum rate of charges is fixed, but it will be found that tho free pUy of private comj>etition is such that this maximum iixed by Act is rarely reached. Beai<!e*, there may be a dozen gas companies, each with pipes in the streets, but only one company can run waggons on one line *ai rails. The taking over, however, of railways by some countries, does not nwet with the support of political economists yon imagine. Certain, well written articles in the North American Kcview on Railways in the United tStatea, by Mr Charles Adams, jun., jxnnted out that under the French or Continental system there were dangers to be avoided as great as under the American system. But it should be remt-inb ml that in America the railways have been largely subsidised, and thereby the State by its interference created monopolies that have had, and will yet liave, a most injurious influence on the States. Indeed, I might point to this American Railway System as an example of the injuries that continually fiow from ("Government attempts at control, &,c Mr Herbert Spencer ha» pomfced out that there is a way to treat railways as State, property, and yet not under the direct management of the State. In fact, railways, roads, bridges, ought to be treated along with the land question, and when tho State ahall resume possession of all the lands—arid recognise that to the people l>eloug tho lands, and 'that no one ought to have a higher than tenant right to them—then can railways and other means of communication l>o looked upon as State property, to be leased, &c., on certain conditions. But the supply of gas is quite another matter. <Jas is only for the few. It is an article to be manufactured and sold. AH the citizens do not require to use it as they do to use a road. And to compel certain—here tho majority —-of the citizens to provide, at their risk, the minority with a commodity is surely indefensible. If the minority are dissatislicd they have a remedy. They can use kerosene or start new works. Nor will there be any fear that this will not be done. As soon as the supplying of gas becomes relatively more profitable than trie investing of money in other businesses there will arise competition. Capital is always ready to bo had for good investments ; and convince a capitalist that the supplying of gas will pay him better than the investing, for instance, in a sheep run, and he will build gas works. And here I come to one evil that this continual threat of Corporation Gas Works has caused. I think I may safely state that it is possible that no sv <>as Works would have been erected ere now, had it not been for the meddlesomeness of our City Councillors. So long as this threat of Corporation Gas Works exists, Mr Haukey must have solo command over the gas "market." But he, I repeat, does not stand alone as a monopolist. Even in the carrying of our goods to the port there is only one Btcam company; and yet, are the rates of freight and passage too high? Would not there be competition when once it was found the company was making a very high rate of profit, relatively to other capitalists ? But I must close ; I have already, I fear, exceeded my due limits. Lot me only add that I think history will Bhow that whenever any State has interfered with trade, has taken upon itself tho discharge of that func- | tion of the social organism that relates to the ! supply of what is termed necessaries—food, j clothing, light {the vi*wml, as distinguished | from the ctrtln-at) —the result ha» been ! wholly injurious.—I am, &c., i Loki.