The question is whether interest on borrowed money for the construction of the railway should be charged to the Construction account.
In principle, it can be argued that interest on loan moneys should be charged to the construction account. (See the argument in para 2.)
But Sir F. Lugard does not carry this principle to its logical conclusion. He only proposes to charge interest on advances from the C.A. and on the advances from the special fund to the Construction account.
The special fund is composed of instalments from the C.A. and Sir F. Lugard does not propose to charge interest on the loan itself to the Construction account, which is inconsistent.
The argument is weakened by the fact that the sinking fund is postponed.
Yours,
2. The question, therefore, to be decided is whether interest on borrowed money for the construction of the railway should be charged to the Construction account.
As far as Railway finance is concerned, the alternative is to let the Colony borrow at a lower rate from the Crown Agents the amount necessary for the purchase of the (temporary) Railway station.
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