TRAMWAYS FINANCE.

Dominion, Volume 1, Issue 232, 24 June 1908, Page 6

TRAMWAYS FINANCE.

Our criticisms upon the finances of the tramways system ( of. this city have greatly disturbed tlic Mayor. At last night's meeting of the City Council he followed up tho letter which we printed from him yesterday with a long and involved re-statement of his excuses for the poor financial showing of the system during the past year. As we have twice thoroughly discussed the points of his argument, there is no occasion for a close discussion of his speech. It will be sufliciont to notice some of his contentions before stating again quite, clearly our case against the tramways managements In its briefest iorm, our criticism

amounted to this: that if there were subtracted from the gross income of the tramways certain items which were in no proper sense tramways revenue, it would be apparent that the tramways had last year been run at a slight loss, and that therefore there is a serious wastage in the management. To this the Mayor replied, in effect, that'our proposed deductions were unjustifiable, and that, moreover, we should really have added to profits certain items that had actually been borne by revenue. One of the latter items was a sum of some £1483 set aside for tho liquidation of preliminary expenses, and the Mayor contends that the Council was not obliged to chargc that sum to revenue. "Ho had. doubts whether it was a proper thing to do." Surely Mil. Hislop does not expect the public to believe that he would violate his financial creed when violation would mean injury to his financial " window display " 1 It was a very proper thing to do, and it is to the Mayor's credit he was on this point at any rate virtuous I and unorthodox. " Another extraordinary doctrinc " that he finds in our criticisms is tho contention that the interest oi) the depreciation fund should not be accounted tramways revenue. What is there extraordinary about it? That sum was not tramways revenue, and its treatment as. tramways revenue, assisted in its degree to cover up the real wastefulness of the management. In Glasgow, it. is true, the. depreciation fund is bloatedthrough good management—but it will be time to follow Glasgow's example in treating the interest on depreciation as re-' venue when the management of our system has become embarrassingly good. Let it bo conceded that, if the interest is left in tho fund, the Council may be able to set aside for depreciation a smaller sum than would otherwise be required. That is only a question oi book-keeping, but by treating' tho interest as revenue tho true working of tho system is obscured. In any event, the amount set aside for depreciation, 2} per cent, as against Glasgow's 5 per cent., is too small to be robbed of its interest. Wc contended yesterday that " if tho sale of power ceased to-morrow, the charges for sinking fund, etc., would not be a penny less than they are," and that i" the £3500 gross receipts [from power] are simply an extraneous windfall in nowise springing from the tramways proper." In his involved discussion of this portion of our criticism, Mr. Hisj.op said not one word in refutation of this plain fact. -

The real issue, the issue that concerns the public, is not simply whether this or that item should or should not have been charged to revenue. Our complaint is that the actual cost of running the tramway service was not less than the income earned by that service, that the management of the men and cars and tracks is bad and wasteful. Thero is simply 110 question that the outlay on .the scrvice, added to the ncccssary. " permanent charges," was not less than the actual receipts. It would not impair our contention even if, with the aid of interest, on a depreciation fund like that of the Glasgow system, the final " credit-bal-ance" were an enormous sum. The Mayor has still to demonstrate that the comparative - table showing, the natural advantages of Wellington " really proves nothing." He has also to show that the concessions made to the tramway men will not still further turn the balance the wvoYig way. Perhaps it is unnecessary to discuss motives with Mk. ; Hislop....Ho could not, perhaps, re : sist his impulse to insinuate that our purpose has been unpatriotic. The public is apt to remember, however, that it is a weak case that falls back, in the .first stage of controversy, upon innuendo', thefirst budding of abuse. It is a matter of great importance that' the financial workings of the tramways shall be fully investigated.