The life of George Stephenson, railway engineer - Lighthouse ...

462 RAILWAY SYSTEM AND ITS RESULTS.
railway ;
whereas, owing to the demands of increasing traffic, and for
high rates of speed, heavy rails are obliged to be substituted for light,
and engines of greater for those of less power. The real question
then is, what portion of the cost of such improvements should be
charged to capital ? In respect to these improvements many fallacies
have undoubtedly crept into railway accounts. The only sound and
rational principle seems to be, not to charge the whole sum to capital,
but simply the diiference. If, for example, a rail weighing 100 lbs.
per yard be substituted for one weighing 70 lbs., the fair proportion to
charge the capital would be, not the entire cost of the 100 lbs. of iron,
but the cost of the 30 lbs. additional weight. The same with the
engines. If an engine of improved construction be purchased to re-
place a less effective one, or for the purposes of increased traffic, capital
should bear the proportion of cost which is due to its future efficiency,
or to the accommodation of increased traffic, and that proportion only.
It may be further urged, that there are extraordinary circumstances
under which the average repairs of permanent way and works will be
disturbed ; and, no doubt, inevitable fluctuations must occur over
which the greatest experience and foresight cannot exercise control.
But here, again, the question arises, is a Renewal Fund, in the form
it is now made to assume, necessary to meet such cases ? Surely, per-
fect security might be attained with respect to such causes of disturb-
ance, by setting aside an Equalizing or Differential Fund, of small
amount, whence the casual excess of expenditure required might be
drawn. Whatever system may be devised, by the most skilful accountant,
to place this question upon an unexceptional basis, it must
be borne in mind, that the feelings of Shareholders and the opinions
of Directors will always practically control the effect of any such sugges-
tions. Influenced, therefore, by the recollection of what has so repeat-
edly occurred in Board Rooms and at meetings of Shareholders, I have
arrived at the conviction that the only sound policy will be to adhere
rigidly to the suggestions here made respecting Renewal Funds. But
whatever may be determined on this point, undoubtedly, the only
method of keeping railway accounts on a proper basis, must be to make
them show whether the annual revenue is made to bear its fair charge
of upholding the permanent way and rolling stock in complete effi-
ciency ; and it would appear that this would be most effectually accomplished
when Renewal Funds were almost entirely dispensed with, and
the charges for repairs and improvements were treated as standing
charges against revenue.
It may be thought that, with respect to fares, the interests of Railway
Companies and of the public are antagonistic. Regarding the