From time to time references were made to the great desirability of having rates cut for such things as fertiliser, and particularly commodities that went to make up the costs of the man on the land. The basis of that was generally the statement that as New Zealand was a primary producing country the more prosperous the primary producers could be made, the better it was going to be. Admitting the fact that New Zealand depended for its prosperity on the primary producers, it was difficult to quarrel with that statement. The railway administration as such had been impressed with the great desirability of continuing that line of action if it was at all possible, and that had created some hesitancy in the minds of the administration in the matter of making any general increase on those low-rate commodities; but then occurred again the question of doing something to prevent an increase in the deficit. He believed that inasmuch as any particular man or concern set up the charges of some other form of transport as his or its standard as against the Railways, then that man or concern could not complain if the Railways in their turn insisted that that standard should operate uniformly in respect of the whole of the transport business of that man or concern.—Mr. H. H. Sterling.

A Mischievous Fallacy.

This prompted him to mention a belief or suggestion that had struck him as being very fallacious and mischievous, but was fundamental and led people to wrong conclusions. It was that the motor had reduced transport costs. That was based on the fact that in some cases the motor carriers charged less for certain goods than the railway charged between the same points, but it did not follow by any means that the sum total of the transport costs to the community was being reduced by that procedure.

Problem of Distribution of Costs.

The point that had to be kept clear in mind was that there were two questions involved that must be kept distinct — first, the total transport costs to the community, and second, their distribution.

If a man adopted a line of action that increased the total transport costs to the community and, provided the distribution of those costs was not altered, so that the increased burden was borne by the party responsible for it, then probably no great harm was done, or at least no great discontent would arise; but when action of that kind was followed by an alteration in the distribution of the costs so that the proportion to be borne by the party concerned was reduced and the burden shifted to other members of the community, or to the community as a whole, then of course cause for dissatisfaction arose immediately. The trouble was that, when a man secured a reduction page 19 in his high-rate goods by sending them by motor, the advantage was individual, while the burden was borne by the community, unless the community chose, by some such method as that outlined, to recoup itself and to that extent restore the status quo.

Some Arresting Figures.

Just to show exactly what it meant to the railways if the Department recouped itself for the loss on account of the higher rate of goods, he had had a few figures prepared which he thought would bring the railway position in this country into vivid relief. These figures showed that if they were considering the railway position of the country on the basis of the service given to the people, instead of the balance of revenue and expenditure, the difficulties, so far as they depended on service, disappeared. He was not going to say that the financial difficulty would disappear, because there was a limit to the capacity of the country to carry social, developmental and other such rates. The railways carried 360,000 tons of grain; meals, 120,000 tons; root crops, 100,000 tons; hard coal, 1,110,000 tons; soft coal, 1,000,000 tons; agricultural lime, 140,000 tons; New Zealand timber, 540,000 tons; chaff, hay, and other low-rate goods, 320,000 tons; and manures, in six-ton lots and over, 630,000 tons. These were just a few figures that he had got out, but probably the more interesting would be the totals. The total quantity of goods accounted for by these low-rate classifications was 6,530,000 tons out of a total of goods carried of 7,613,000 tons.