3.
172
whom the matter was referred for comment.
7.
With regard to the reference on page 9 of the êo-
gument to the ratio of division of earnings, I may here remind
you that the present ratio is 65-35 for the Chinese Section
and British Section respectively, as laid down in the Working
Agreement This was based upon the hypothetical returns on
the approximate then known capital expenditure for the con-
struction of each Section, namely Chinese Section $15,130,000
and British 3eotion $10,533,000. Since that date considerable
additional capital has been expended on completing both See-
tions and providing facilities for traffic, until at the end
of 1928 the ratio of the respective capital accounts had been
reversed to such an extent that the figures were, Chinese Seem
tion $15,914,900, and British Section $20,401,956.
8.
If the ratio were now to be placed on a mileage
basis, it would be necessary to adopt the principles followed
by British Railways, as exemplified in the Regulations of the
Railway Clearing House, and to add Special Allowances in mil-
eage for exceptional engineering works such as Bridges, Tun-
nels, Docks, etc., which would possibly result in a ratio less
favourable to the Chinese Section than the present one.
I have the honour to be,
sir,
Your most obedient servant,
(SIGNED) V.F.SOUTHORN.
Officer Administering the Government.
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