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Loser Takes All

13th March 1959, Page 106
13th March 1959
Page 106
Page 106, 13th March 1959 — Loser Takes All
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Which of the following most accurately describes the problem?

K

" NOCK knees and a squint might seem dis advantageous in a barmaid," said Maggie's brother Cromwell, but Charmian here turns them into assets."

"They must help her to keep the wolf from the door," I agreed. . . "Every barmaid has a technique for that," said Cromwell. "I was thinking rather of the increase Charmian brings to the turnover of 'The Ivory Tower.' First of all, most of the people who come in here obviously have in mind some serious drinking, with the minimum of distraction. In the second place, visitors are inclined to think the beer must be very good stuff in a pub where the landlord apparently has no need to provide extra attractions."

"Your friend Bloggs must reason in the same way," I said, "and perhaps he is right. It takes half an hour to find his premises tucked away in a yard right off the main road, with not even the name of the firm put up anywhere as a guide. It is true that his vehicles carry the slogan 'Bloggs can take it—estab. 1895,' but you might imagine the words were painted on in that year also. Anybody wishing to prove whether the boast is true must have a hard job getting in touch with the firm.' By the time he has succeeded, he is conditioned to believe that no firm could be established so long and advertise so little unless it provides a superlative service."

"Bloggs has a somewhat different object in mind at the present time," said Cromwell. "He has for too long fooled himself that the best way to run a transport business is to get plenty of traffic at good rates. He has been doing that for some time (although he has some reservations about the rates), but it seems to get him nowhere."

"Very few hauliers will admit to making a profit," I said. "So that I will continue to•believe that Bloggs is doing well, even if he proves he is working at a loss."

Losses are Good Business "That is exactly his point," said 'Cromwell. "He has seen the benefits to be derived from losing money. He remembers the situation 25 years ago, when his licence was fresh from the mint. He had great plans and was full of confidence, because his main rival was a shabby concern that had seen better days and was on the way out."

"You could almost say that it had knock knees and a squint," I said.

" Precisely," said Cromwell. " As the years went by, Bloggs saw his competitor going more and more down hill. Then the competitor was nationalized, which only made matters worse. Bloggs worked the harder for he thought that his rival might soon go out of business. Much to his dismay. he now sees that rival spending lavishly on an improvement scheme, making losses that are immediately mopped up by a public loan, and adding insult to injury by undercutting Bloggs' rates, depriving him of traffic he had had so long that he regarded it as his property."

"So Bloggs does not like competition," I said.

" 'Competition ' is another word about which Bloggs has reservations," said Cromwell. "However, he is always ready to learn. He has shouted louder than anybody else about the tough, resilient haulier, who asks nothing beyond the opportunity to make a living. Now he secs that he should be more subtle. The way to success in transport slems to be by incurring a loss—the bigger the better."

"I don't doubt for one moment that Bloggs can easily

provide figures to prove that he is operating below cost," I said. "In which case he can no doubt claim that he must have a subsidy if he is to remain in business. Unfortunately, there seems nobody to whom he can put his claim."

"Then why do you suppose he has been supporting the demand for an impartial transport inquiry?" said Cromwell. "He hopes to be first in the queue to give evidence. And he has never been one to complain that road users suffer from too many laws. The only fault he has to find is that the laws are of the wrong kind and have not been framed with his interests in mind."

"What legislation is Bloggs hoping to persuade an impartial inquiry to advocate? " I asked.

"It should be obvious," said Cromwell. "What Parliament have done for the railways they should in equity also do for Bloggs. In their next gobbet of tr

insport law they should include a clause making it comp' isory for him to submit an annual report and accountF to the Minister of Transport. Bloggs will then get himself regularly debated in Parliament, and need do no more than follow the technique that has already provei effective. As soon as he can show a deficit he is a made man. He will have the Chancellor reaching for Ifs chequetuak.-:.o.-1 the Opposition urging him to make it a 1-." ----"it all sounds reasonable," I sal(' r•'but Bloggs still has to get the Tribunal to make the initial recommendations on his behalf."

Self-supporting Subsidy "He is already preparing the ammunition," said Cromwell. "For one thing, he maintains that his subsidy, unlike the railways', will be self-supp.7ting and will not cost the nation a thing. He will point ouf Tcill_wIA that he uses fuel that is heavily taxed. The tax wilI rnoll! than pay the modest subsidy sufficient to keep Bloggs in comfort, so that the Chancellor will make a profit."

"It's a pity," I said, that Bloggs can't make his eloquence available to the railways. There has been some bitter comment lately by hauliers about railway ratecutting. The argument is that, as the railways incur an enormous loss in any case, they are not justified in making the loss even bigger at the expense of their competitors. The sole response from the railways, apparently, is a refusal to admit that any of their charges is uneconomic."

"Bloggs, of course, whilst agreeing that you are making creditable progress in his school of economics, would himself go a little further," said Cromwell. "He would point out, on behalf of the railways, that their rate reductions are a valuable contribution to the national welfare. If they save the trader money, he can reduce his prices and so help to lower the cost of living. Alternatively, the trader's profit goes up and he pays more tax, so that the Chancellor is in a better position than ever to keep the railways on the dole. Their deficit may also go up, but then there is more in the kitty to meet it."

"The railways should certainly wake up to the opportunities," I said. "They still talk as though they were making a profit like any other depressed industry. For instance, when road users grumble at having to pay in tax many times the cost of the roads, where the railways pay no tax at all, the stock reply is that the railways should not be taxed because they have to pay for their own track. Which invites the retort that they really pass the cost of the track on to the Treasury."

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People: Cromwell, Maggie

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