TAKAPUNA TRAMS.

Auckland Star, Volume LI, Issue 211, 3 September 1920, Page 5

TAKAPUNA TRAMS.

i COMMISSION HEARS EVIDENCE. UPKEEP AND REVENUE. TRAIN A>T> BOAT JTCURES. The Royal Commission set tip to inquire into the Takapuna tramways and ferry aervice continued its sitting in the Magistrate's Court this morning; when evidence in support of various contentions was adduced by the Company the Borough Council, and the Rate- j payers' Association, ivhioh are the three : parties represented in the proceedings. I 1 Mr. E. C. Cutten, S.M., is the chairman) ' and the other members of the Conimis-; , sion are Messrs. Peter Barr and I Frederick Black. Mr. A. S. C. Brown appears for the Company, Mr. F. Loirrie for the Borough Council, and Mr. A. M. , Gould for the Ratepayers' Association. The Commission is to inquire (1) [ whether the tramway and ferry service ' is run at a loss, and if so, whether such ] loss is due to bad management, or causes ■beyond the control of the Company; (2) can the Tramway Company, at the scale 1 of fares mentioned in the Order-in- [ Council, be run without lose by the Com- ! pany, so as to comply with the provisions of such Order-in-Council; (3) 1 should the Takapuna Borough Council apply for amending the Order-in-Council. ' J authorising increased " charges, Svhat ' ehould such increased charges be? and ■ (4) ie it- expedient to bring down lcgie- ' lation to enable the scale of fees and ; charges which the Company is at pre- : sent authorised to charge to be amended 1 even if the Borough Council does not I; apply'for an amending Order-in-Council. ; to what extent should such scale be increased? A FEW FIGURES. [ Mr. Brown went over the points set down for investigation. He said he could . answer question (1): The loss on the tramway working for the year ended , March 31 last was £5520 4/2, taking ex> s penses plus depreciation. Question (2) was already answered unless it could be I proved that by alteration in policy or t management an increase of £5000 or r £ 6000 could be made in the Company's S profits. Regarding question (3) his Com- . pany had authorised him to say it had . no deeire to make an exorbitant profit. It had created higher ralues in the dis-1 j trict of Takapuna and had not shared » this increase. It had conferred a boon r on the public by creating safe, rapid, and t convenient access to the beaches. Hβ \ submitted that as coin was a measure I of service rendered it, would be fair to f ask payment commensurate with the ser- - vice rendered. This fwa a not done on the j Takapuna tramways at present. The - last pre-war year showed an expense of £9217. With £1000 for depreciation 3 the Company's profit would have been £2000. Under normal circumstances the f Company would by now have "turned j the corner" and would be paying a i, moderate return. To-day there was a s very serious danger of two things— c diversion of traffic to Devonport, and c the creation of competition with the ferrj' service. Counsel suggested that the Commission begin by deciding whether the fact that the Company had '■• entered into a deed of delegation would ■-! preclude any application for increased r fares. He submitted that since last d ! March the tramway expenses had been n j increased by something like £1750. Last .8 year's' tramway revenue had been I £12,526, and the expenditure £5520. To S ' make no profit and no loss the revenue , would therefore have to be practically c ' j £20,000. The actual capital of the Com- ; * pany was £42,383, plus £31,100 in deben- * ; tures at 7 per cent. -That made up prac- " tically £73,000, and 5 per cent interest on this would be £3550. Even this 0 j profit would not mean a 5 per cent divir I dend 'because of the interest on ttie r ! debentures, and to get this earn the pre- ! sent fares on the trams would require a to be doubled. George C. W. Morris, public aceoun- * tant, said he had checked the figures. 3 They had been copied accurately from '. the books. The directors had fixed the f amount to cover depreciation. To Mr. Gould: The statement concerning revenue covered traffic only. He j was aware that a considerable income Q was derived from mails and goods. .. Another statement showed £981 profit , from freight, mails, and sundries. y Another statement showed £3211 0/8 r to be the total profit of the combined a tram and ferry service, omitting £3211 v depreciation. Deduction of this and Ij addition of £440 for other adjustments, 1 left the adjusted profit as £2298 13/2. Adding the interest on debntures the a profit became £4122, or about 5J per c cent, on the whole capital involved. t John Kerr, secretary and manager of i I the company, produced a copy of the dj balance-sheet, also of the Order-in-e Council and deed of delegation. All comp moditiea the company used had increased o greatly since 1913-14, and the growing c i expenditure was beyond the control of s, J the company. Witness . explained the c system of administration. He answered J" question (2) "No," and questions (3) and o j (4) "Yes." An increase of at least 100 y I per cent, was necessary on tram fares, i-! Half of the profit of " £981 for mails, s freights, and sundries should, perhaps, c be jrpportioned to the steamer and the other half to the boat. Crose-examined by Mr. Gould, Mr. i- Kerr admitted a net profit of 5i per :- cent after deducting £1,352 7/6 for f J depreciation. Without this deduction r I the profit was stated by the directors as a I 6A per cent. This depreciation « sjjinueh greater than the average. The r condition of the engines was at its worst y just before the new engines arrived. It !- -was daie to great efforts on the part of c the staff that the engines were kept runa ninp at all, and during the last year the Milford service was-cut down to keep i- the service going. At the end of 'March t last there was no engine in perfect rune ning order, and between 'March and July, 1919, the engines were repeatedly going out of order. There were then c four engines. At the end of 1919 two h engines at least were running at rej_ duced pressure, and then there were many breakdowns. Two engines were _ ; now in commission,, the contract for c i thoroughly overhauling another wae r i let in April, and it was etill in th"c sliop, c I and the fourth was sent out aibout a a ( fortnight ago. s I RATEPAYER'S STATEMENT. j ] Mr. Gould put in the following stateq ! ment:—'"The Takapuna Ratepayers and if Residents' Association say that the c losses sustained by the Tram .Company t have been and are attributable to the y following matters (inter alia) within the control of the company: —(1) Underd capitalisation. (2) The laying down of n a line and provision of plant designed s for electric traction and subsequent use c of Bteam traction. (3) Commencement ,f of operations with unsuitable and inadequate plant. (4) Failure to lay down the tram track in a proper and workmanlike manner at the outset, thereby i, entailing' reballasting and relaying. (5) n, Failure to provide a cheap and cons- venient eervice. conducive to settlement id and increase of permanent traffic. (6> The transactions outside the company's

business of the Bayswater Land Syndicate, with ■which the company was interlocked in the personnel of its promoters and first directors affecting the company as to capitalisation, route and in other respects, the effects of which are still operating. (7) Failure to lay down the tram track in tarred macadam. (Proceeding.)