An Illusion Dispelled
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R0 A D transport, as regards both the carSkimming the Cream Claimed to riage of passengers and be a Normal and Very Gerzeral the conveyance of goods, has Economic Principle often been accused of "skim ming the cream " of the traffic, to the alleged detriment of the railways.
The fallacy of this hoary complaint was empha,sized soundly .and convincingly by Mr. George Schwartz, the well-known writer on economic matters, in an article published in "The Sunday Times" of October 17.
He points out that so far from skimming the cream being a vicious operation, it is the essence of the economic principle. Because mankind cannot perform illimitable tasks in any given time, it has to concentrate on the more valuable at the expense of the less important. He says, amusingly: "Suppose a visitor from Mars pronounced as follows: A study of the distribution of population on the earth shows that these perverse and depraved people have located themselves in the most hospitable parts of the globe. They are skimming the cream of the earth's resources and neglecting such unprofitable areas as the Sahara and the Arctic.' The obvious answer is, 'You 'try living there, chum.'" He adds that the "Queen Elizabeth" and the "Queen Mary" are skimming the cream of the world's oceanic passenger traffic by voyaging between Southampton and New York, and asks if anyone would suggest that these vessels should be diverted to put in at least a couple of trips to some remote places.
Complaints Against Coach Operators As regards coaching, he says there are apparently some unscrupulous coach operators who put on services to the seaside in the summer months and take them off in the winter. They obviously skim the cream of the holiday traffic. Complaints have actually been made about operators who run coaches to football grounds only when there is a match on, and what about the people who run vehicles to Epsom only during Derby week?
A departmental store endeavours to select and display the cream, from the selling point of view, of its available merchandise. Why should it fill its windows with unfashionable millinery? The newspaper must skim and present the cream of the news although sufficient matter may come in to fill, say, 40 pages ' and perhaps only eight or fewer are available. There is not enough space to print Ministerial speeches in full; only the cream can be extracted, and. if looks like sour milk, then that is just too bad. The reader picks out the books he requires, and the playgoer. the plays he wishes to see. In fact, it is not the producer or operator who ordains the cream-skimming process in economic life. It is, and should be, the consumer.
Mr. Schwartz recommends eschewing the pejorative use of the phase in relation to traffic. If the term Must be used, let it, he says, he elevated to the dignity of a main economic principle, for such it is. If there be any case for running a transport service at a loss in the Hebrides, meet the deficiency out of public funds, not by raising fares in the middle of London.
Two Dangers of Nationalization The chief danger in the nationalized industries is that they will be operated on the swings-androundabouts principle, with the unremunerative sections being carried by inordinately high charges elsewhere or, worse still, by forcing people who want to go on the swings to use the roundabouts instead.
We believe that these comments on a matter which is of great importance to our industry will do much to disillusion those who so often make this allegation. As a matter of fact, road transport. despite its need to operate at a profit where private enterprise is concerned, frequently runs services which may not pay for a considerable period, if at all. This is particularly the case in connection with passenger transport. A big bus company must meet the requirements of the public. As the populace spreads so new routes must be opened. even if the return in fares may not cover the operating costs. The railways exemplify the principle of " skimming the cream" in their classification by which charges for freightage are' adjusted, the main principle being not the cost of conveying a load of a certain weight and bulk, but what the traffic will bear. If this be not skimming the cream then we would like to know how else it can be described.
We admit that road transport has attracted the cream of the traffic, not merely because of lower rates, but for many other reasons, of which perhaps the most important is the convenience of what is virtually door-to-door transit. Often a manufacturer, merchant or purchaser greatly prefers to send goods by road, particularly if they be valuable or fragile, because they are far more likely to arrive at their destination safely and undamaged, and this without the need for expensive and heavy packaging or crating.
On the passenger side the great expansion of coaching not only for holidays but for general travel indicates the partiality of the public, maly millions of which find that the road is far more attractive, cleaner, and affording a comfort which, too often, has been lacking from travel by rail.
There is little doubt that the British Transport Commission will always be faced by this problem of competition between road and rail, whether or not the passenger side of the road transport industry be nationalized. Endeavours may be made to force traffic and passengers on to the railways by increasing road goods rates and fares, but such a move would undoubtedly result in dissatisfaction amongst those with loads to send and people who prefer tile coach or bus.