MUNICIPAL TRADING.

Star (Christchurch), Issue 16875, 28 October 1922, Page 8

MUNICIPAL TRADING.

TO THE EDITOR. Sir, —In your leading aiticle m Thursday’s issue you still evade my oft-reiterated questiou as to yout views on the ethics of fair trading. 1 have maintained that it is not fair trading for a municipality to use its advantages as a distribu tor of e ectric current and its freedom from land anti income tax to compete with its own ratepayers in the sale and installation of electrical appliances. I have invited vou, since you attempt to defend such unfair competition on grounds of public policy, to say how far you would take the principle—if you would like to see it extended to the drapery trade, the ironmongery trade, the bakery and butchery trades, the coal trade, and the nevyepaper trade for examples. Yon replied by making —1 distinction between municipal c°repetition and community control, and vben I retorted that municipal competition involves community control, and if exerted over a wide enough field would involve community control of all trade and the eventual disappearance of the private trader altogether, you airily assured me that it was all a matter of expediency and convenience and that th© couimonsens© of the citizens could, be relied upon to prevent unnecessary or foolish excursions into municipal ownership. I am afraid I am too old-fashioned to believe that a question of basic principle can be settled on considerations of expediency and convenience, and breaches of principle condoned 60 long as they arouse no overwhelming degree of public indignation. I am too old-fashioned to agree with you when you say, as you did in your last reference to this subject, that “ the question of justice must be determined by the use which the department makes of the money which it saves.” Robin Hood was no less a thief because he stole from the rich to give to the poor. But let us take this matter on your own basis. Your test of the expediency of what I call unfair municipal competition is that it shall, in any given case, be “ neither unnecessary ” nor “ foolish.” Very good. AVhere is the necessity for th'e Christchurch City Council’s excursion into the trade in electrical fittings ? Let me quote your owq words: “ The private electrical concerns are able to do their work as well and as cheaply as the City Council. They buy in the same market, and are run as business concerns. There is small reason to assume that private trading will be abolished through the operation of a municipal department which cannot possibly cope with more than a small percentage of the electrical work of the city.” Obviously, then, any profits which the city makes and which it is able to apply to t( the extension of electrical facilities ” must consist mostly of its eai ings through not having to pay Land and Income Tax, because municipal concerns, to quote your own dictum, are not usually eo strictly n-anaged as private businesses. There is here no saving to the local consumer, who pays as much for fittings and installations as if there were no municipal department. There is no saving to the community at large, because the central Government is losing taxation. All the community gets is the dubious advantage of having a part of the electrical trade conducted without the 11 stricter management which usually distinguishes private businesses.” I think I have put the question fairlj’. The whole burden of your reply has been that private traders in the electrical business have no cause for complaint. Well, if they have no cause for complaint then the city electrical department is useless in so far as it purports to compete with them. It is no part of my mission to disclose trad© secrets by expressing an opinion as to whether the existence of th© city electrical department curtails or increases the profits of private traders. But you cannot have it both ways. If the profits of private traders are curtailed by unfair municipal competition then they have cause for complaint. If they sustain no loss—if the city enterprise is so wastefully managed that even its savings in land and. income tax do not enable it to sell goods and services cheaper than its ratepayer competitors —then what-is the use of it "Do anybody? It is a gamble with the ratepayers’ money in which the council says to the public: “Heads, you win nothing; tails, you pay our losses.” I am sorry the line of defence you have chosen has led you on to the horns of a dilemma. I should prefer to discuss the ethics of municipal trading, but apparently you cannot defend municipal trading on ethical lines. The defence of expediency also seems unreliable.—l am, etc. RATEPAYER. (This correspondence is now closed. Our correspondent breaks no new ground, and we have fully defined bur position in regard to municipal trading.—Ed., ** Stair.-*)