RAILWAY SINKING FUNDS
[To the Editor of THE SPECTATOR.] Sin,—Answering Mr. Keen, I should say that the primary object of ,,the institution of :sinking hinds- in. relation to municipal and statutory undertakings' is to prescribe a life for them on such common grounds of prudence as the liability of supersession by newer methods which render buildings, plant and equipment obsolete, and the effects of decay, which for varying terms can be counteracted by repairs, but not
permanently or indefinitely. '- In dectrieal, gas and water undertakings, the charges to consumers are so fixed as to make the concerns self-supporting and not with a view to making profit, which is regarded as a had principle. If there should be any deficiency, it 'becomes a charge upon municipal rates.
" Except where money is borrowed under special provisions contained in local Acts a local authority which desires to borrow money for capital purposes must, generally speaking; obtain the approval of the Minister of Health of the scheme or works and his sanction to the borrowing of the required funds." There are ample central checks to prevent local authorities embarking in " unsound " enterprises.
Mr. Keen's question as to „the replacement of the whole of the railway property in situ is hypothetical, irrelevant and of no practical iniport. The highly controversial qUestions he raisei as to whether the directors could be expected to foresee all the influences that may have affected wages and the relative treatment of railways and highways by the State are not germane to the question I raised of the propriety of sinking funds.—I am, Sir, &c.„ 2 Lancaster Place, Nil'. 3. • A. W. CRA3EPTON,
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