THE OTAGO DAILY TIMES. SATURDAY, APRIL 18, 1914. THE MUNICIPAL TRADING DEPARTMENTS.

Otago Daily Times, Issue 16051, 18 April 1914, Page 8

THE OTAGO DAILY TIMES. SATURDAY, APRIL 18, 1914. THE MUNICIPAL TRADING DEPARTMENTS.

The annual report of the City Treasurer upon the results of the working of the municipal trading departments for the past financial year must have removed from the minds of the majority of the members of the City Council the last shade of doubt as to the present impracticability of any proposal to raise a loan for the erection of a Town Hall. One only of these departments has shown a result that i& more favourable than was obtained in the preceding year. This is tha Water Department, the revenue of which increased by £3230, this being secured at an increased cost of £252 only. Tha net profit returned by this department for the .year was £15,842. The other three departments between them yielded a profit of not very much more than half this amount. The Gas Department is apparently feeling the effects of the competition of the Electric Power and Light Department. Its revenue . increases but slowly. For the past year it was only £461 in excess of that of the previous twelve months, and this was less than the increase in tho expenditure, the principal factor in the growth of tho working cost being a heavy rise in the coal bill. The net profit returned by the department was, however, distinctly satisfactory,. amounting to £5540. The extent to which the business of the Gas Department is being affected by the operations of the Electric Power and Light Department is shown by the fact that an expansion of £8218 is recorded in the receipts of this latter department for the year—this following upon an increase of £5010 in the preceding ; ear—and that its revenue now exceeds by a considerable margin the revenue of the Gas Department. The expenditure in connection with the Waipori system—largely swelled last year by reason of the heavy floods during the winter—continues, however, to increase, and the net result of the year's working was a profit of £992 only, or rather less than £100 below ;that of the previous year. The figures of ' this department should satisfy the Corporation respecting the necessity for taking into serious consideration the question of the rates that are charged to consumers of electric power and light. It is very soothing, no doubt, to our sense of civic pride to know that the Corporation of Dunedin is supplying electricity for illuminating and poweT purposes at prices that are cheaper than obtain anywhere else south of the line, and the policy under which motive power is supplied at attractive rates to those engaged in industries that give employment to large numbers of persons is one that can be cogently defended and proved to be generally m the public interest. The profit, however, which is being earned at the present time by the Electric Power and Light Department represents an almost infinitesimal return upon the capital invested. It is to be acknowledged that there is weight in the argument that the enterprise has now reached a point of development when the operating expenses may be said to be practically fixed so that the of the current sold to every additional consumer in the city is virtual profit. We are ourselves disposed to share in some measure tho optimism of the chairman of the departmental committee respecting the future of this enterprise. But the ratepayers as a whole are impatient for results that will justify the faith they are asked to repose in the scheme. They have a right, moreover, to expect that the department*shall produce returns so tangible as to enable it to bear its fair share of the cost of the administration of the ordinary municipal services. It is necessary, in short, that the department shall be conducted in the interests of the community as a whole as well as in those of the consumers, and it should bo possible without a great deal of delay so to adjust the tariff as to ensure that, while remaining the most attractive in this hemisphere, it shall yield a fair net return upon the capital outlay, in some measura this argument applies also to tho figures of the Tramways Department. The increase in its expenses during tho past year was largely in excess of the increase 'n its revenue. This may be attributed in part to the fact that a considerable amount was appropriated to maintenance charges. The truth remains, however, that a large proportion of the passengers, the holders of concession tickets, are carried at rates that are unremunerative. It is probably a popular act on tho part of the Corporation to carry the majority of the persons who uso the tramcars at a price that does not pay the expense. It is, however, a policy

that would not appeal to any tramway proprietary which was not elected by the popular vote. Moreover, it is not a good business policy. The effect of it is that the holders of the concession tickets are enjoying a special privilege at the expense of the general body of the ratepayers. The City Council has now given a sufficiently long trial to its present system of concessions. The effect in the past year is more or less shown in a shrinkage ol £1425 in the tramway profits. Such a result should convince the Council of thrf need of a revision of the scale of fares.