6 JANUARY 1933, Page 19

RAILWAY SINKING FUND

[To the Editor of the SPECTATOR.] SIR,—Your correspondent, Mr. Crampton, is severe with the railway directors of the past for not having reduced their capital by means of sinking funds, as is done in the ease of municipal trading concerns. May I ask him :

1. Are not sinking funds imposed on municipal trading because the capital required is raised on the security of the rates, regardless of the soundness, or otherwise, of the trading venture ?

2. Is not an important point in the fixing of company capital depreciation the question of replacement cost, and what increase, rather than decrease, in capital would be required to replace, in situ, the entire property owned by railway companies ?

3. Are the railway directors of the past to blame for not foreseeing that a time would come when railway wages, the

greatest outgoing, would be fixed by vote-catching politicians regardless of the rate in the market, and that the railways would have to meet State subsidised road competition masking unemployment relief for other trades 1+—I am, Sir, &c., F. G. KEEN.

33 Princes Square, W.