“NOTHING MORE DISGRACEFUL”

Sun (Auckland), Volume II, Issue 355, 16 May 1928, Page 12

“NOTHING MORE DISGRACEFUL”

TREATMENT OF LOAN MONEYS CRITICISM BEFORE TRAM COMMISSION THE criticism which Mr. E. H. Northcroft, counsel for outer bodies, levelled at the City Council yesterday, in continuing his address, was of a particularly outspoken and pointed character. He said Mr. J. A. C. Allum was the only one in the Auckland district who appeared to be satisfied with the system, and strongly denounced the incidents now generally referred to as the diversion of loan moneys.

■JV/TR. NORTHCROFT said the council admitted having spent a quarter of a million on tracks. He suggested it was nearer half a million—on tracks supposed to have been in nearly first-class condition when bought. He suggested that had the council gone to the' ratepayers and admitted this position after buying the tramway system, the ratepayers would have had something to say. As it was, any embarrassment had been avoided by spending money out of revenue and establishing suspense accounts, the ratepayers knowing nothing about them. Mr. Northcroft strongly criticised the spending of £140,000 on Gaunt Street depot, without the slightest; reference to the ratepayers, and questioned whether the change-over had all the advantages that were claimed for it. “Nothing more disgraceful has ever occurred in the history of the city than the shameless manner in which the ratepayers were invited to give the city money to spend on the assurance that the council intended to spend it in a certain direction, and in which the City Council, having the money in hand, proceeded to spend practically all of it on purposes entirely different from those for which it was given,” commented Mr. Northcroft, concerning the £280,000 loan. “There is a higher and more effective judgment on this sort of action than that of the highest court of the land,” remarked counsel, “and that is public opinion. The natural corollary to that sort of thing was the reception the council got when it went to the ratepayers for the £500,000 loan.” Referring to elections, Mr. Northcroft said the city councillors’ claims to virtue because of their return to the council were not necessarily well based. When 63 candidates sat for 21 seats electors could seldom know, more than half a dozen, and their returning of the old councillors was not necessarily a testimony to their ability. UNJUST TREATMENT In stressing whai he asserted was unjust treatment to outside bodies, Mr. Northcroft commented on the monopoly without reference to outside bodies, the failure to provide tram exnsions where wanted, the inability of outside bodies to ascertain the true position as to earnings or to enforce efficiency so as to make reduction of fares. They must take what service was given, however poor. The absence of policy was notable. Mr. Ford was non-commit-tal, and Mr. Allum’s attitude was “Leave it to me.” Mr. Allum was perfectly content with the council and the machinery it handled. All they got from him was, “There is nothing wrong. Leave it to us and all will be well.” The outside bodies said the City Council had antagonised the city and the suburbs. No one was satisfied with the position—except Mr. Allum. They said the city had either proved inefficient, or grossly tactless. This criticism was not merely destructive. Their advocacy was for a metropolitan transport board, which they considered would solve the existing difficulties. Their reasons were: (1) That the whole area would be represented and have a voice in control. (2) The difficulties of the city through lack of co-operation and harmony would be eliminated. (3) Extensions would be within the board’s own area and difficulties ov£r local delegations would be removed. (4) The board would have exclusive control of time-tables, fares, etc. (5) Financial responsibility would be spread over the whole area. (6) Under such a board the residents would receive service at its cost of production, subject to contingencies. PROPOSED ACTIVITIES Mr. Northcroft suggested an outline of the possible constitution and the financial provisions. He realised the objections to a board controlling the finances of another body or bodies, and said the idea was that the proposed board should take over all the financial and working obligations. That the board should buy was proper, but that it should pay more than it was worth was not. Pie referred in this to the “indiscretions of the city council” in the taking over of the various bus undertakings, and in the amount for goodwill. The question of price would be one for an assessment court. Mr. Northcroft commented on the various powers of the suggested board, in the way of taking over services, and outlined, the differing suggestions he anticipated. Referring to general street traffic Mr. Northcroft thought that there might be objections from the City Council against a second body having control in the streets in the way of increasing traffic. The city was, however, in that position now, with regard to outside bodies, and he suggested that a metropolitan transport board might take over all traffic control. “This is no new consideration with the City Council,” remarked counsel on the board idea, and he referred to previous resolutions of the council when it first took over the tram system. “The leaving of transport control in the hands of the city merely leaves in their hands a means of dragooning the outside local bodies into joining the city to enable them to get trams,” asserted Mr. Northcroft. Counsel got into an argument over a report presented to the Mayor, Sir James Gunson, by the late Mr. Walklate, once manager of tramways. Mr. J. Stanton, city solicitor, remarked that there was no record of the report having been dealt with by the council. THE MAYOR—AND COUNCIL Mr. Northcroft said the council had passed resolutions on the subject, and had given the Mayor power to deal with it. The position had then been —that the Mayor and the council were one and the same- In other words, the Mayor was the City Council. Concluding, Mr. Northcroft said the evidence to be called would be in the

direction of justifying the criticism made, and showing that the only reasHutchison, accountant, secretary of the Automobile Association, and lecturer onable and proper solution of the present impossible position was by the creation of a Transport Board. COMPUTATIONS QUESTIONED The first witness was Mr. George W. on accountancy at the university. Witness said he had previously had occasion to investigate Auckland tramway accounts in 1922 when fare increases were in question. The double account system was in operation in the department, but it was not strictly adhered to. “Witness established the deficiency on sinking funds referred to by Mr. Northcroft in opening. Witness considered that track renewals should be charged entirely to revenue, with the exception that the difference between reinstating the track to its original state, and bringing the track up to an improved form of construction should §ro to capital. Only a most careful check could establish the proper figures, but the department’s job sheets past two years did not provide sufficient detail to make an accurate allocation between capital and revenue. PROFITS ON PAPER on the £ 32,443 spent on tiacks in the year 1926-27 and charged to revenue, a sum which was to be written off over a period of 20 years, witness considered the procedure quite . K should have been written Off immediately. The holding of the amount in suspense resulted in the n’AU, belne , duplicated as an asset in l.° b ? lanC r^ et - The P r °P er Practice to establish renewal reserves. On he department’s allocation the £IOO,OOO unemployment Joan spent on tracks and t be . 90 -? 00 yet required, would be divided £ 123,000 to revenue and £ 67,000 to capital, and each of the annual accounts for the years 1920 to 1927 should bee ? debited with an amount of i 10,375 to meet this renewal. The result would have been that instead of a profit being shown each year there would have been a loss. Witness commented on what he considered the over-valuation of assets in the stores account. “Supposing the unemployment had been twice as bad, and the city had had to raise £200,000 with the primary necessity of providing employment, would you have treated the amount in the same way?” asked Mr. J. S. Barton, S.M. Witness said that in a position such as this, where the expenditure would have been senseless, even if necessary, there should have been a special account to deal with it. Extraordinary necessities could not be dealt with by ordinary measures in many cases, though a consideration of all the circumstances was always necessary. Witness stressed the necessity for the renewal fund, more especially as the life of track renewal loans exceeded the life of the tracks. Mr. Stanton said he had said that only the original loans were provided with sufficient sinking funds to extinguish them on maturity. These were the only loans with 2 h per cent, sinking funds.

Mr. V. R. Meredith, counsel for suburbs: We understood that all the sinking funds were supposed to be capable of meeting the loans. (Proceeding.)