TRAMWAY ADMINISTRATION

Press, Volume LXXIV, Issue 22435, 23 June 1938, Page 8

TRAMWAY ADMINISTRATION

TO THE EDITOR Or IHE PRESS. Sir, —The letter of Mr Frank Thompson in “The Press” of June 21 is very much in the nature of Satan reproving Sin, as it was during the term of Mr Thompson’s management that the rot commenced in the Christchurch tramways. If Mr Thompson will take the average rate struck by the present and past Labour boards, he will find that it is not much different from the deficit that was in existence when Labour got control of the board.

Also, the finances of the board are in a very much better position now in regard to assets than in 1934; and yet I find in a report submitted to the board by Mr Thompson on April 18, 1934, he states that if a private company were in as good a position as the board was. then the directors would be well satisfied. Probably he has forgotten this report, but if he cares to call on me, I can show it to him, and it may refresh his memory. This occurred when he had just reported a deficiency of £19,978 for the year ending March 31, 1934. Mr Thompson in his letter quotes an annual saving in standing charges of £II,OOO bequeathed by the old board. This statement is quite worthy of Mr Thompson’s aptitude for juggling with figures, as while figures show a saving of £II,OOO on the one hand, they show a loss of a similar amount in interest on depreciation funds which was incorporated in the loan conversion. Actually, there was no saving. Part of the high costs of running the trams to-day is attributable to the fact that all reserves and depreciation funds were used up by the Citizens’ board either to avoid levying a rate or in the loan conversion, and the only recourse the board has had since that time of getting new plant, buses, etc., is by way of short-dated loans. For instance, the loan that was obtained to get the Diesel buses for Worcester street is costing the board £16.7 per cent, per annum in interest and sinking fund. Mr Thompson failed to tell the public how, under his management, and that of the Citizens’ board. £297,957 of depreciation funds was used up before 1933, and in 1932 no less a sum than £37,923 was used. Mr Thompson also endeavours to infer that the wages paid by the board to its employees were not given after judicial investigation; in this statement Mr Thompson is quite humorous as I have vivid recollections of being in the Arbitration Court some few years ago when Mr Thompson was using every endeavour to keep the Court from making an award to cover the traffic employees of the board, owing to a slight defect he had discovered in the Tramway Act. These employees of the board were later forced, owing to this position, to resort to bargaining under the Labour Disputes Investigation Act instead of going to Conciliation Councils or the Arbitration Court. In a recent Conciliation Council sitting regarding certain employees of the board, after an agreement had been arrived at the Conciliation Commissioner, Mr Ritchie, congratulated the assessors for the Tramway Board for the able manner in which they had looked after the public interest during the proceedings. I can assure Mr Thompson that the wages paid by the board, are only in line with those paid by other local bodies and in some instances are lower. A great amount of the extra cost of ‘running the tramway service is owing to salary and wage increases and the introduction of the 40-hour week, and in other instances increased cost of material consequent on the same legislation. Also, the board is carrying more than 3,500,000 more passengers than when the Citizens’ board ceased office.—Yours, etc., E. PARLANE, Chairman, Christchurch Tramway Board. June 22, 1938.

TO THE EDITOR OF THE PRESS. Sir, —In the postscript to my letter of June 20 I said that there were some points in your criticism of the Tramway Board relating to reserves, to obsolescence, and during rating legislation about which, in fairness to the board, some could be made. This I now propose to do. Your main criticism, however, relates to the heavy increase of rates to £28,000, supplemented by a possible further increase in fares to make up £4OOO. That still stands. With respect to the depletion of reserves, much has been made of this, but. in the main it helped the old board in loan redemption operations to save £II,OOO a year. This saving continues, although, maybe, subject to small reduction because of subsequent consequent transactions. During the closing years of the old board’s life a careful valuation showed that on values at that time there was a balance of assets over liabilities of £122,000. If a similar valuation were made to-day after four years of Labour rult probably a similar balance to the good on the capital side would result. I do not think, although I have not the figures, that any serious objection to the present board’s handling of reserves could be made, but it may be said that in times of prosperity such as we are now enjoying more transfers to reserves might be made, than in times of adversity, such as the old board experienced during the slump period. I; is the position of the revenue account, with its direct effect on rates, which is now the chief matter for concern. As to obsolescence against which you think the board is not making adequate provision, the term has wide applications. A thing may be termed “obsolescent” which is still useful but only old-fashioned, or it may be “obsolescent” if a newer form of transport would produce better financial results. We should only be justified in wholesale “scrapping.” such as one of your correspondents suggests, if there was a handsome net return on operation, which unfortunately is not the case at present. The last point is that you think the board will soon have to ask Parliament for authority to extend the board’s voting powers. This misconception arises through the reference in the board’s report to its intention to exercise its full authority to raise a general rate of 3-16 d in the £. This is the limit to a "general” rate, but

the board has in addition power to raise “special” rates to the amount of interest and sinking fund, jyhatever that amount may be. No legislative authority for further rating is necessary. These, after all, are minor points. The principal one remains, viz., that despite advantages of loan redemption operations and despite increase in revenue, due principally to more prosperous times, the board is increasing the rate levy to £28,000 and may in addition have to raise fares. This, too, in spite of its election promise; “We can make the trams pay.”— Yours, etc., FRANK THOMPSON. June 22, 1938.