WELLINGTON TRAMWAYS

Dominion, Volume 11, Issue 298, 5 September 1918, Page 5

WELLINGTON TRAMWAYS

AND SOUND FINANCE. . In amplification of the figures given to a Dominion reporter a few days ago, showing tlie return made by the tramways undertaking on the capital expenditure employed, the Mayor (Mr. J. P. Luke) says that it may be interesting to the jmblio to know hov? tha return is accounted for. For the purpose of turning the fullest light on the matter, the Mayor dissected the figures for the tramways undertaking only, apart from power supply (largely derivable' from the tramways power-house) and the track lighting. Without those considerations, the capital expenditure on tramways was £758,227, and the gross profit for the last financial year amounted to 8.22 (£8 4s. Gd.) per cent. Out of the gross profit £21,013 was required for interest on loans and £5121 for sinking fund, in all £26,134, which would leave a balance sufficient to return 3.45 (or £3 95.) per cent, on tlw capital cost; but as a prudent body, and one" which' has certain statutory obligations toperform (under the Empowering Act), U per cent, had to bo allowed for renewal and -reserve fund (an amount totalling £18,398). That reduced tlie return to one of 2.42 (£2 Bs. 6d.) per cent. Sundry appropriations amounting to £6235) accounted for another .82 (16s. 6d.) per cent., which brought one to the correct net balance to credit, viz., £11,606, or 1.53 (£1 10s. 9d.) per cent- .Jn business, tho Mayor stated, tho gross profit was sometimes wholly devoted to dividends. It all depended on the nature of the business and plant involved. Had the tramways been such ar business the handsome dividend .of 8} per cent, would have been slioiyii, but unfortunately rails and wheels wore out and cars had a- trick of going out of order, so they bad to make the provisions enumerated above to keep the business on a perfectly sound footing.