TOPICS OF THE DAY

Evening Post, Volume LXXXIV, Issue 11, 12 July 1912, Page 6

TOPICS OF THE DAY

■ Next week the City Council, at a epeciaV meeting, will The City dißcuee the report reTramways, cently presented by j the Tramway Board, and will consider whether the present position of the tramways and tht> needs for capital expenditure warrant the raising of an extra £10,000 a' year from the pubjac. Councillors have now the complete balance-sheet for the financial year ended 31st March; and they ar© 1 able to ccc the directions in which the expenditure has' increased. The net surplus, after the allowances for interest, sinking fund, and depreciation, is given M ±(1242, but the board estimates that a loss of about £2000 waa incurred on the year's working. This loss is evidently figured out by charging interest against contributions from the depreciation and renewals fund, now totalling £87,560, which has been used in capital account to obviate borrowing for new works chargeable to capital. The balance-sheet wae worked out, on the basis of former years, before the council resolved to charge interest on the depreciation fund 60 used. The assessment of this interest is not an eaey matter of finance. • For example, supposing that in one year the council requires £10,000 for capital expenditure, and has a cum of £10,000 in tile depreciation fund. If the council borrows £10,000 it has to find the interest and sinking fund out of the tramway revenue, but against this it has the interest on £10,000 invested outside the tramways., If the fund money of £10,000 is used instead of an ordinary loan, the council escapes the payment of interest to moneylenders. By charging interest on the fund so used, the council put* the people in much the same position a« they would have been if a loan had been raised. The difference is that, instead of an outside moneylender getting a certain interest, the council ohtains the interest which increases the fund. The change meano that the depreciation , fund (when used for tramway purposes) must consist of the usual allocation, plus interest, instead of the bar© amount earmarked, without interest, which has been the practice up to the present. If this process of calculation is made retrospective, what amount must be docked fvom the profits of former years? If the council had worked on loan money, instead of on the depreciation fund, " what would be the position, approximately, to-day, assuming average rates for the loans and for the investment of the depreciation fund? This should not be a difficult calculation to make, and it is one that should be made. Various features of the balance-sheet will be discussed in another article. When Sir Joseph Ward declared er- , roneously on Thursday Geography afternoon that the Masin Politics, sey Ministry contained only one farmer, he i'orgot at the moment that tho new Cabinet included six representatives- of country districts. Wellington (with three Ministers) is the only urban area represented, and tho disproportion between town and country may bo increased if a tenth Minister is appointed. We do not mention this in any spirit of littleness, because the "geographical factor" does not weigh with The Post. We refer to the fact merely as somothinjr. on which some Opposition critics may seize if they think that they can make political capital out of a petty pitting of town . against- country. The lute Ministry had five members desoribable as urban and one member for a mining district. This auola of town representation reflected ie result of last elections, which showed a further stage in the eviction of Liberals from country districts. Since Mr. Seddon's time Mr. Masscy's men have been steadily winning the rural territory, and last December they conquered an appreciable portion of town ground. Two scats wore gained in Auckland (Parnell and City West), one in Dunedin (where Mr. Massey now holds two electorates}. Wellington has Massey men for 'all, seats except Wellington South. The new Government is evidently well established in country jdistricts, except in Canterbury, and florae other portions of the South Island. The Liberal and Labour organisers are hoping to check Mr. Massey's advance in the towns. The last census revealed a preponderance of urban population, which, the opponents of Mi. Massey hope to ' thoroughly work during the next three years. The Political Reform League, tlio Government equivalent of the old Liberal und Labour Federation, is wfcll aware that the hostile forces will be busy in the cities and towns, aud, therefore, elaborate plans are being prepared to keep a grip of the urban ground already gained, and to annex more, if possible. The Massey men have the advantage of solidarity, and they are evidently doterniined to operate biiskly before their opponents recover from the present setback. - - "