The Tramways.

Press, Volume LXIX, Issue 20898, 4 July 1933, Page 8

The Tramways.

A report presented to the Christchurch Tramway Board yesterday by the works and traffic committee has several useful features. Prepared as the basis of a review of tramway finance, which will be awaited with keen interest, the report shows that the board's assets, valued in relation to present replacement costs, exceed its liabilities by £122,000, a considerably larger amount than the surplus arrived at by estimating annual depreciation from original costs. Since the board faces next year the maturity of two-thirds of its total indebtedness and will have to renew a large part, this evidence of the security available, independent, of course, of that which exists in the board's rating powers, is very properly brought forward. Most of. the tramway loans provided for only a small amortisation rate, insufficient to extinguish them at maturity. The total in hand is about £260,000; but to this must be added depreciation funds, wisely established for the same purpose, which now amount to £202,000. The redemption fund next year, therefore, will not be far short of £500,000; but however the board may or must apportion it as between the £BOO,OOO that matures then and the £300,000 that matures in 1934, it will have to ask for the investment or reinvestment of a very great sum. Investors will no doubt respond readily, and the board will enjoy some relief from the interest charge it has borne—enough, according to the report, if the Loans Board sanctions a reasonably long term for the new issue, to ensure balanced revenue accounts, " even at present " low traffic returns." When the financial review referred to above is available, it will no doubt translate this statement into figures, which it will be more useful to examine; but in the meantime it is encouraging to find this prediction of balanced revenue and expenditure accounts resting on the present low returns and not on hopes of jan improvement. It would be more than encouraging, it would be a complete reassurance, if the board could prove that the returns will decline no further. Actually, as a report on the effect of the latest fare adjustments indicates, though it is statistically slender, the decline continues. The board takes the view that the fall in passenger and revenue figures may be attributed to the depression, and assents to the optimistic opinion expressed in the report that " when prosperity "returns, with increasing traffic in- " come the old days of revenue sur- " pluses may be expected." But it appears to be unsafe to expect too much from the return of prosperity or to consider the depression as more than a factor accentuating a decline primarily due to other ; causes. The board's revenue and passenger figures were falling before 1929, and falling rapidly; and it will not do to build much on the expectation of their taking more than a slight and possibly brief upward turn. That is why, as we have said, it is encouraging to sec that the forecast of stable finances is based on the reduced figures.