The Press Friday, June 5, 1925. Tramway Trade.

Press, Volume LXI, Issue 18400, 5 June 1925, Page 8

The Press Friday, June 5, 1925. Tramway Trade.

We make no apology for repeating the question we put last week to the Manager of the Tramways. Tho Board's Chairman in his first statement, when the idea of imposing fractional fares by way of impost was originally announced as the solution of the problem how to make tho tramways pay their way, set out with actuarial precision :i series of figures indicating the cost price and selling price of the trade unit—a carmile—as bought and sold by the four leading tramway concerns in New Zealand. That statement, with a third column showing the car-mile profits calculated by ourselves and not set out in the Chairman's tabulations, is as follows:— : Car-mile Trading Unit. Selling Price. Cost. Profit, s. d. s. d. d. Auckland .. 2 4 J 110 J C Wellington ..2 4 1 10 6 Dunedin ... 1 7} 1 'H 6i"" Christchurch 1 6} 1 0J 5J The explanation given by the Chairman for the presumed financial weakness of the Christchurch undertaking in comparison with other concerns was that the latter enjoyed the advantages of higher fares and more crowded cars (Dunedin, in the matter of fares, being excepted), wherea9 in Christchurch tho fares were low and there was less overcrowding. Just how far that explanation fails to explain is worth pointing out. To the ordinary business mind the only element that really matters when it comes to buying and selling.goods or services is. the percentage of profit on the turnover. The tramway commodity is the car-mile just as in other lines of business the trading unit may be a pound of wool or a pair of gloves. It may, therefore, be asked, with perfect propriety, do the comparative figures as quoted by the Chairman, indicate that the Christchurch Board in the buying and selling of its unit of trade was, before the fare increases were authorised, receiving a less percentage of profit than similar undertakings elsewhere f Auckland, on a buying cost of Is 10Jd, made a profit of 6d; Wellington, on a buying cost of Is lOd, a profit of Cd; Dunedin, on a buying cost of Is ljd, a profit of 6£d; and Christchurch, on a buying cost of Is OJd, a profit of 5Jd. The impression intended to be conveyed by the Chairman's statement was that on the foregoing figures the Christchurch servico could not be expected to pay unless the receipts were increased, and, with them, the margin of profit, and an ordinary business man may be pardoned for asking why. In relation to the cost charges operating in Auckland and Wellington, the ssd margin earned in Christchurch .is a considerably better percentage return than , the 6d margin earned by the northern systems. Christchurch expends a fraction over Is in order to gain a profit of 5Jd, whereas the northern cities have to expend nearly double that amount for a profit of only sixpence. In Dunedin certainly the profit earned is GJd on a cost charge of Is ljd, which would indicate a very high degreo of financial, stability—perhaps more than is really required unless there are special circumstances of a technical or other nature which mako it imperative, that &\ substantially increased profit sho*uld.be produced from current operations. There may, of course, be perfectly good reasons why the Christchurch tramway service requires a larger percentage of profit than the northern systems, but if so they do not appear to bo known -to the ordinary business man. His natural conclusion would be that the margin ' already is quito sufficient provided tho system is controlled and organised at an expenso no greater than the servico can reasonably bear. Tho matter of higher fares and more crowded cars in other .centres, given by way'of explanation by the . Chairman of tho Christchurch Board, really does not enter into the argument at all, for all costs and receipts are based on tho car-mile, and high fares and overcrowding have already been taken into full account', and cannot be used twice over. If Auckland receives so much more per car-mile, the Auckland Board has to spend so much more to get it. Tho same applies to Wellington. But even so, the margin of profit in both cases, as shown above, is less in proportion to that of the Christchurch system—much less, in fact; and the Board is simply trifling with public opinion whon it refuses to give any explanation.