TRAMWAYS FINANCE.

New Zealand Herald, Volume LXIV, Issue 19714, 13 August 1927, Page 14

TRAMWAYS FINANCE.

THREE MONTHS' FIGURES. ADVERSE BALANCE OF £4OOO. " NOT A FAIR COMPARISON." NON-RECURRING EXPENDITURE. " The tramway expenditure exceeded the revenue by £4038 in the first three months of the present financial year," stated Mr. J. A. C. Allum, chairman of the Tramways Committee of the City Council, in addressing a meeting of ratepayers at the Grafton library last evening in connection with the proposal to borrow £500,000 for tramway and transport development. " A loss was not really incurred in that period," added Mr. Allum. Itwas not fair to ask us what our position •was for the first three months of the year, but we have been asked and we are not afraid to disclose the position. We are holding nothing back. General repairs and maintenance are very heavy,J but some items are non-recurring. For instance, the renewal cf tram-tracks at the intersection of Queen and Customs Streets cost between £12.000 and £13,000, andi that amount was'paid out of the revenue received in the first three months, although the work will last for 10 or 12 rears, and so should not be set against three months of trading. The actual amount that should be debited is £3OOO, leaving £9OOO to be covered by the remaining nine months of the year. "From a profit and loss'point of view there was a surplus of approximately £SOOO in the three months. This figure is subject to audit, and 1 am reluctant to give the information as it is difficult to strike a balance-sheet for any portion of a year. We have been far too candid over the whole business, but we have no regrets."

" No Window-Dressing." The Tramways' Committee had hoped it would be counted in its favour. that it had brought down its new policy before the loan proposal was submitted, said Mr. Allum. "We have not done any window-dressing," he added. "It might have been better if we had done. lam inclinedJto think that politics rather than honesty is the best policy, but I hope I am wrong." " All our financial difficulties have arisen from the competition of motorbuses and the high cost of opeiating

buses," Mr. Allum continued. "We must protect and ~ preserve the sum of £1,750,000 sunk in the tramway undertaking, which is not a thing to play -with or to smoke- a pipe over, nor is it a thing that shoxild be the shuttlecock of politicians. It is a. trading concern which has to pay, and we claim that we are running 'it on sound business lines. " The wages bill alone for the hrst three months of the current financial year was £91,500, exclusive of salaries. Can you afford to jeopardise the success of an undertaking that is paying the ■workers of this city £7500 a week? Our reserve funds totals £320.000. \ou are going to risk this if you do not carry this loan to develop the undertaking. Buses Must Pay or Go.

" The trams, then, are in a sound position, but the least said of the buses the better." Mr. Allum remarked. * We are determined, however, to grapple with the difficulties, and we believe there are bus services which can be made to pay. Our slogan as far as -the buses are concerned is ' Pay or go.' "I am absolutely convinced there- will be no collection' of rates in connection with the loan. It is necessary, of course, to strike a rate, but, as far as I am aware, it has never been necessary to collect a rato in connection with any trading department of the City Council. If the loan is; not carried, the policy in regard to charging tram-fares on bus routes along which it is proposed to make tramway extensions cannot be maintained. We are prepared to give people on those routes tram-fares and sections on the buses until the trams are put there, but we are not- prepared to do so indefinitely. That is not a threat or a suggestion of a threat. It is in line with the rest of the bus policy, 'Pay or go.' Method of Raising Loan.

"When this loan is-carried on Wednesdav, we are not .going to the bank on Thursday morning to raise the money," said Mr. Allum, in pointing out that it v.'as proposed to raise the loan moneys over a period. Assuming that a third of the total sum of £500.000 was raised each year, the interest and capital charges would be as follows.: —£12,000 for the first year; £24,000 for the second year; and £36,000 for the third and subsequent years. "We confidently believe the undertaking can carry these charges," he said. All the extensions would not be carried out in the .first year. Those carried out in the first year would be coming to the profit-earning stage as the other works were Being carried out. "The extensions will not show a loss, apart from the interest and capital charges," said the speaker. "It is estimated the actual operating costs in the f first three years will be .-£15.000 less than ' the receipts. The extensions are absolutely necessarv, and it is estimated they will be made to pay after the second or third year, but from our experience we believe they will pay before then. "Against the extensions and the socalled losses must be set the l&rge saving made from the cessation of omnibus operations on those routes. Had the bus competition not come along, these people would long ago have had trams. Loan and Employment. "One hundred and twenty men in the undertaking will be dismissed if this loan is not carried. If the loan is carried, then 60 men at present walking the street "will jobs in one department alone—as coach-builders, for all trams,with the exception of the motors, wheels and axles, will be built in New Zealand. There will thus be work for two or three years on the road and in the workshops. We do not relv on that argument for carrying the loan, but -we do rely on it in asking citizens who may have an adverse opinion to give the matter a second thought." Answering a question, Mr. Allum stated that in the first three months of the current year's, operations the trainways had to face the competition of the community buses, which was greater than generally thought. The old bus policy of running alongside the tram track was also in operation. The tramways had, therefore, been "hard hit" in that period. For the month of July, which .was really the first clear month the tramways had had, the position was most satisfactory, but he could not give the figures as these %vere not yet completed , An explanation of the new policy with reference to trams and buses was given by Mr. S. I. Crookes, a member of the Tramways Committee, who spoke on the lines of previous addresses. After numerous points had been elucidated, Mr. J. R Lundon moved that Messrs. Crookes and Allum should be thanked for their "heroic and herculean efforts," but the meeting favoured an amendment, expressing thanks to the speakers and confidence in the cause they were advocating.