Die invloed van spoorwegtariewe op die vestiging van nywerhede in Bloemfontein
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Date
1957
Authors
Border, Thomas Going
Journal Title
Journal ISSN
Volume Title
Publisher
University of the Free State
Abstract
In dealing with the subject of the influence of railway tariffs on the localization of industry in Bloemfontein, it should firstly be pointed out that South Africa has undergone extensive industrial expansion especially during the years following world war II, but, as indicated in Chapter 1, this industrial development has unfortunately been limited to a relatively few concentrated areas namely, Southern Transvaal, Western Cape, Durban Pinetown and to a lesser extent Port Elizabeth. These four regions were jointly responsible for 83,3% of the country’s net industrial production during the year 1951/52. Of these four regions Southern Transvaal is by far the most developed area, having alone been responsible for 48,9% of the Union’s total net industrial production for the same period. Bloemfontein, on the other hand, although classified as the eight most important industrial centre in the Union and after Southern Transvaal the second most important inland industrial centre, is still as an industrial centre very much less developed than more concentrated regions mentioned. The Free State as a whole was during the year 1951/52 responsible for only 3,6% of the total net industrial production. Of the total number of workers employed in industrial concerns with more than 10 employees, Bloemfontein had only 1,7% of this total during the year 1948/19.
It is clearly understood that it is difficult to determine with any exactness the actual influence which railway rates exort on industrial location in general. The importance thereof must however not be underestimated as railway rates are inherent in most localization factors such as markets, raw materials, power etc. In determining the influences of railway rates on industrial localization in Bloemfontein, due consideration has been given to the other localization factors such as the proximity of a suitable local and regional market, labour supply, the availability of a sufficient supply of water and power, climate and other general factors. These were found to be generally favourable for further industrial expansion in Bloemfontein. As regards Bloemfontein as market area, it is shown that it possesses a local and regional market which although relatively small in comparison with Southern Transvaal and other concentrated areas, contains the second most important inland market, and a regional market which covers a considerable area. Although this region consists of the more sparsely populated regions of the country, it is a region on the threshold of important developments in respect of mineral deposits in the Western Free State and goldfields. There is also the growing importance of the agricultural areas of the region. It is also shown in chapter 1 that in the absence of any discrimination in railway rates, Bloemfontein’s locality is second only to the Southern Transvaal as regards the cost of distribution within the national market.
It is clear that there are definite reasons which go towards making a large market region more attractive for an industrial locality such as, the immediate proximity of a large market, prompt delivery, larger possibilities for expansion, quicker adaptation to changes in demand, the presence of a sufficient labour supply, etc. It is also clear that geographical conditions such as rich mineral deposits were largely responsible for the development and extreme concentration of industries in the Southern Transvaal region, but the fact must not be overlooked that the railway tariff system played an important part assisting industrial expansion in that area. The question is, in which way and to what extent did the railway tariff system encourage this large concentration of inland development in the Southern Transvaal, or in other words to what extent did the railway tariff system reward industrial development in other inland regions, resulting in practically all the industrial development having been restricted to one specific inland region?
The most important bearing which railway tariffs have on the localization of industrial enterprises can clearly be conceived from the requirements stated in the South African Act of 1909, which emphasize that the South African Railways and Harbours must be administered on business principles with proper regard to the agricultural and industrial development of the inland regions of all the provinces of the Union. By comparing the requirements of the Act with the actual pattern of inland industrial development which exists at present, one finds rightly enough a considerable inland industrial development, but unfortunately this development is largely limited to on inland region of one province only, with little or no development having taken place in other inland regions.
The Railway Administration by means of their tariff system adopted a positive policy towards encouraging the expansion of distribution and industrial concerns in the inland area of the country, but the results of this policy with it’s “maximum”, “distribution” and “nearest harbor” rates, helped towards attracting industry to the Southern Transvaal only, without providing any benefit to other less fortunate inland regions such as Bloemfontein.
Irrespective of opinions as to the influence which the South African Railway tariffs have had on the siting of the country’s industries, the fact remains that the country’s extremely centralized industrial development occurred together with a railway rates policy which was extremely discriminatory in it’s application. For this reason also special attention has been given in this study to these discriminating aspects of the previous railway rates system, and their influences on the localization of the country’s industries. Attention is also given to the probably future influence as a result of the abandoning of these discriminating rates and complete revision of the previous rates policy in August 1954.
It is found generally that as a result of the higher railway rates on manufactured articles than on the raw materials, the tendency exists to locate industries as near as possible to existing market areas. Considering this tendency together with the fact that the Southern Transvaal is by far the most important national market area, it would only be natural to expect that any railway rates policy which discriminates in favour of this region would only go towards attracting still further industrial expansion within this area.
On careful examination of the South African Railway rates, especially those in operation before August 1954, one finds that industries in the Southern Transvaal were not only located within the country’s most important national market, but were also placed within reasonable distance from the other inland and coastal markets as a result of a discriminating rates policy. The distribution rates had the effect of halving the schedule rate, and thus of halving the transport distance in terms of railway rates, from declared distribution centres to other centres in the inland area. This policy also resulted in a considerable decrease in the rate on goods forwarded from distribution centres in the inland area to destination stations in the coastal area (in the instance the difference was taken between the schedule rate from the forwarding station to the harbor nearest to the destination station and the port rate from the destination station to that harbor.) The nearest harbor rate which applied to products of South African manufacture forwarded directly from the place of manufacture, had an even wider effect in that the actual distance between the forwarding and destination stations was not taken into account (except in applying a minimum rate which was considerably lower than the schedule rate), but the distance for rates purposes was that from the destination station to it’s nearest harbor, in cases where this mileage was less than the distance which the goods had to be transported. The reason for these rates was to enable the inland manufacturer to compete favourably with the imported article, but had the effect that a locally manufactured article forwarded for example, from Bloemfontein to Queenstown (distance of 248 miles) was charged the same rate as a similar article manufactured in and forwarded from Johannesburg to Queenstown, which is a distance of more than double that of Bloemfontein to Queenstown. The actual transport distance was also considerably reduced for rates purposes as a result of the application of maximum rates on certain products, such as coal. A further discriminatory aspect which still exists in the published harbour rates, is to be found in the harbour rates between stations in the Southern Transvaal and the ports of Buffalo Harbour and Algoa Bay. These harbour rates in respect of received and forwarded traffic place certain centres in this region approximately 170 miles nearer to Buffalo Harbour and approximately 210 miles nearer Algoa Bay.
These different aspects of the Railway rates policy placed industries in the Southern Transvaal in an exceptionally favourable position for the distribution of their products to other market centres in the country, and acted as a strong incentive for industrial localization in that area, but unfortunately on the other hand it seriously handicapped the industrial development of other inland regions such as Bloemfontein. It is thus to be expected that since the major discriminatory aspects of the previous rates policy have been abandoned, conditions will be more favourable for the industrial expansion in Bloemfontein.
Description
Dissertation (M.Com. (Industrial Economics))--University of the Free State, 1957
Keywords
Railroads -- Rates -- South Africa -- Bloemfontein