TELEGRAPH CHARGES

Wanganui Chronicle, Volume 77, Issue 107, 8 May 1934, Page 4

TELEGRAPH CHARGES

MINISTER DEFENDS CHANGE REPLY TO CHAMBER OF COMMERCE CHAMBER REITERATES OPPOSITION Despite a lengthy reply from the Postmaster-General (Hon. Adam Hamilton), the Wanganui Chamber of Commerce remains unconvinced that the recent change in the system of charging for telegrams was for the best. It has decided to advise tha Alinistcr accordingly. “It is perhaps within your knowledge that for some years tho telegraph system has not been returning adequate recompense in view of the capital outlay and labour costs which it involves, stated Mr. Hamilton's letter. “For too many years the department has been receiving Is tor longdistance telegrams which cost Is 3d or more to handle. Underlying the change in method of charging, however, was the idea of evolving a sys-

tem which, while requiring the longdistance telegram to pay for itself, would uot necessarily increase the revenue yield on the present volume of traffic, but would nevertheless tend ultimately to increase the revenue by bringing about an increase in business. And the way to an increase in business is now open by reason of the sender of the short-distance telegram being enabled to send his message without paying more than an equitable fee.

“Long-distance traffic comes to the telegraph solely because it cannot be handled so cheaply by telephone. Hence it can be said that the flat-rate system of charging had the effect of depriving the Telegraph Branch of short-distance traffic, leaving only the long-distance traffic, which of itself had never returned adequate recompense for the cost of handling. For making up the deficit in this regard the short-distance traffic had been relied upon. The long-distance traffic requires tho use of long-distance lines, which involve a heavy capital outlay and costly maintenance charges, lu these circumstances, is it not reasonable to call upon the traflic which uses such long-distance lines to yield a return a little more in keeping with what it costs to give the service? “It may be contended that the telegraph cannot hope to secure the shortdistance communications which can so readily and so cheaply be conducted by telephone. In this connection, however, it needs to be remembered that all people have not telephones; and the only convenient manner in which many people, although living iu the same or an adjacent town, can be communicated with urgently is by means of the telegraph, if the department, by reducing the rate, can double the snort-distance traffic, it will have gone a long way towards placing the Telegraph Branch on a sounder basis. “in regard to the special collect fee for collect telegrams: The collect telegram traffic has in the past not borne its full share of the cost of handling, which in the case of a collect telegram involves special clerical and accounting work. Notwithstanding that, the simplest possible method of accounting is used, tho cost of this extra work is high in proportion to the value collected. Moreover, in many cases several calls have to be made by message boys before payment of tne amount due can be obtained. Generally the people who use the collect telegram do so for very good reasons and the facility has the effect of simplifying their recording and accounting systems, lu the case of business firms who invite customers to use tiie facility, presumably most collect telegram bring orders, in whicn case the charging of the collect fee to the firms’ advertising accounts would probably show that in proportion to its cost this form of advertising returns more than any other form. The department, of course, would much prefer that all telegrams were prepaid. In view of the foregoing, those who use the collect facility can have no logical objection to paying a little more than those who pay the cost of their telegrams at the time of presentation. The user should pay for the value he receives. “Alcmbers of the chamber will no doubt be glad to have made available for their consideration some figures showing the effect on revenue of the graduated system of charging, and it will perhaps help them to visualise the effect of the change better if the information is given in the following form:— “Taking the traffic figures for last year that constituted the basis for formulating the new scale, and assuming that the traffic neither increased nor decreased, the effect on annual revenue of the new scale of charges would be as follows: The revenue from ordinary telegram traffic would increase by £10,116. The revenue from collect telegram traffic would increase by £llOO. The revenue from urgent telegram traffic would decrease by £2500. The revenue from Sunday and holiday traflic would decrease by 50 per cent. (Actual amount not at present available). “Ignoring the decrease of 50 per cent, in revenue from Sunday and holiday traffic, and assuming that the traffic level remained constant with last year’s, the net increase in revenue would be £8716 per annum. On last year’s total telegraph revenue figures of approximately £272,000, this represents an increase of approximately 3 per cent.

“But many business firms make the statement that fewer telegiams will be sent under the new rates. Therefore it may be sate to write down the increase in revenue on ordinary telegrams from £10,116 to £4OOO or less. Also, with the decrease that may take place in collect telegram traffic, the prospective increase in. revenue estimated at £llOO may actually not be realised. The increase may be no more than £6OO. On the other hand, owing to the increased use of the urgent facility, the loss on urgent telegrams may not be as much as £2500 — it may not exceed £l6OO. Hence, allowing fur these possible alterations in the volume of traffic, the net increase in revenue may actually be in the vicinity of £3OOO per annum. Such a figure would represent an increase on tho total telegraph revenue of less than 1J per cent. “Thus is fully borne out the statement made at the time the new scale of rates was announced, that the schedule had been designed not with any intention of directly increasing the revenue, but rather with the idea of

evolving a more equitable system of charging under which th e sender of each telegram would pay a sum more hi keeping with the cost of sending his message. “Summed up, the flat-rate system of chaiging remained a payable one only so long as the loss on long-distance traffic was adequately offset by a corresponding profit on the short-distance traflic. As guardian of the public purse, it was the duty of th e Government to see that when this position no longer obtained something was done to remedy matters. “The new system lends itself to the making from time to time of minor adjustments in rates which may appear to be warranted. With the former flat-rate system a general increase iu charge would have been most unfair to the sender of the short-distance telegram, while a decrease would have given an unwarranted concession to the sender of the long-distance message. Ihe fact that under the new system of charging certain business firms will have slightly increased telegram bills, while the department’s total revenue will not be apparently affected serves to dispel the Jinpression that the reductions are more apparent than real, and that few people will benefit by them. “As you know, the business of the post, oihee is conducted as far as possible on lines similar to those adopted in the management of business houses, and in the light of the information given herein, i feel sure that, as business men, members of the chamber wiil appreciate that the former system of charging the same amount for a telegram for local delivery as for one for delivery a thousand miles away had outlived its usefulness. With the conditions of communication as they exist to-day, it had become commercially unsound. Something definitely had to be done, and I am sure that," on reflection, members of tho chamber will agree that what has been done is truly in accord with business principles. They may rest assured, 100, that in seeking a method of restoring the telegraph system to a sound position, every effort was made to adopt one which would cause th 0 least interference with the commercial life of tho community.” Mr. A. S. Burgess said that it was nonsense for the Minister to go to the length of five pages. It had been stated that the change had not been brought about with the idea of increasing revenue, yet, so far as he could see, it had been put into operation for that purpose. The speaker moved that the chamber reply advising that it is still of the same opinion with regard to the change, and that the matter is one which the Associated Chambers should take active steps to oppose. This was carried unanimously.