RAILWAY ACCOUNTING.

Manawatu Herald, Volume LI, Issue 4543, 13 December 1930, Page 4

RAILWAY ACCOUNTING.

REFORM IMPERATIVE. (Associated Chambers of Commerce). In the report laid upon the table of the House of Representatives last session, by command of His Excellency the Governor General, the Commission appointed to investigate the affairs of the Dominion’s Railway Department deals trenchantly with the questions of depreciation and reserve funds. The Commission found that the Department had scrapped, or was a'bout to scrap, assets in the form of rolling stock, engines, workshops, bridges and railway stations, nominally of a value of some £lO,000,000 and that no real provision had been made to cover this clearance. The authorities, hoAvever, had devised an easy means of overcoming this difficulty by transferring the interest on this dead asset from the left hand pocket of the public pants to the right-hand pocket. In other words, part of the interest on the capital liability which has to be paid by the taxpayer is met from some other fund than the railway revenue account, although the taxpayer pays it all the same. By the authority of the Finance Act of 1929, the capital liability on which the Department is required to earn interest, is reduced, as previously mentioned, by an arbitrary sum of £8,100,000, but the Department is given no authority to write down its assets by a corresponding amount. The report emphasizes this point. “-Your Commission,” it states, “is of opinion that this adjustment of capital should be made so that the assets of the Department will he shown at their true value. ... A proper adjustment of the position between the Treasury Department and the Railway Department in regard to the payment of interest must take effect, for, in the opinion of your Commission, it is unsound and unreasonable for one Government Department to demand from another payment by way of interest in excess of the net earnings arrived at by approved accounting methods.” Surely these contentions are (be - yond dispute. So far no steps appear to have been taken by those in authority .to give effect to these axioms and the further one delves into the facts the more obvious it becomes that the only salvation for the Dominion’s railways lies in their complete removal from political control.