The Dominion. WEDNESDAY, MARCH 20, 1903. TRAMWAY FINANCES.

Dominion, Volume 1, Issue 155, 25 March 1908, Page 6

The Dominion. WEDNESDAY, MARCH 20, 1903. TRAMWAY FINANCES.

The cable message which we print-to-day respecting' the unsatisfactory state of the tramways accounts of the London County Council will prove to be very timely if it induces the public to take enough interest in the tramways of this city to make the condition .of the tramway finances a subject for discussion during the current Mayoral campaign. The message referred to gives little indication of what are the unsatisfactory features of the book-keeping of the Highways Committee. A leading firm of independent auditors, however, has reported that " the methods of keeping the accounts are unsound," and tlie one.example of unsoundness quoted in the 'cable message is sufficiently extraordinary, i.e., tliat although the displacement of horse traction by electric traction resulted in a loss of £1,000,000, earnings from the horse services, amounting to £203,592, were applied to the relief of rate's 'instead of to the reduction of those losses. According to the report which the Highways Committee issued last October, the total capital expenditure up to March 31 last was £6,946,310, and the total debt repaid was given as £812,746, pcirtibii , of which was £209,573' frorii the proceeds of sales of horses and old materials. It would appear that this last item, is the "£203,592" wliici]i should have gone to tlie redaction of losses, or the extinction of debt, but which was not so applied. If this is the case it is obvious that the; accounts stood most urgently' in.fieed of revision by independent audit. : • \ The v Wellington public niav , with profit reflect upon the advisableness having our own tramwa,ys accounts Dverhauied by an independent investigator, and set forth for everyone to read, I<W of tlie' ratepayers know r'ery much about the condition of the tramway finances. So :far' as the information available at present enlightens us, it is impossible to say whether the system.is running at its full efficiency, [n a letter to tlie public Press on September 3 last,* the Mayor gave an estimate of the. profits to be expected at the eiid of tins current financial year. Ee assumed that the net revenue ivould be _ '£47,0d0, and that after deluding interest and sinking fund ;here would be a .balance, of £22,744, >ut of which depreciations, etc., might ie paid. The Mayor added that personally lie expected the net revenue to je about £51,500, 'According-to a report issued by tlie Electrical Engineer ;he net revenue , for. the first ;leven months of the financial year vas £38,701. On ,that basis the liet 'evenue for the year should amount to a little over £42,000, -or something like ' £9500 below, Mr. Hislop's estimate; 'and if £36,400 is allowed for sinking funds, interest, and adequate depreciation'(the e]even months' proportion is £33,378), i the .'final : profit would be about £5800, instead of itlie £15,000 ; odd _ deducible from the. Mayor's tentative figures. ■ That the tramways are a paying: concern seems to be shown by any estimate, but the difference between thlie Mayor's estimate arid, the actual facts indicates that there are some factors in the : working of the system that are doubtful quantitiesi, .Even'-where' there is little room .- for doubt an independent overhaul of the finances occasionally is Manifestly, a good thing. Large .public services. under municipal control cannot be too • closely attended to, and there is a tendency in all, such services towards a relaxing of tlie driving belt, and a resultant loss of full efficiency, tlnless' the financial machine is subjected to special inspection every now and then.