A (2) 8.-
SECRETARIAT FOR CHINESE AFFAIRS.
40. After representations by this department for a good many years the numerous semi-public charitable accounts over which a certain amount of control is exercised by the Secretary for Chinese Affairs have at length been separated from the accounts of purely Government revenue and expenditure collected and disbursed by the department.
41. Audit is now only concerned with these accounts in so far as the Treasury acts as banker. The accounts are subject to examination by authorised Chinese auditors.
KOWLOON-CANTON RAILWAY.
BRITISH SECTION.
42. A copy of the Manager's Report for 1935 of the British Section of the Kowloon and Canton Railway is enclosed (Enclosure N). The accounts have been regularly rendered and satisfactorily kept.
43. The reduction (from 1st October 1934) of the British Section Share of terminal through traffic receipts from 35% to 28% is largely responsible for the decrease in the revenue ($1,411,674) as compared with the previous year ($1,639,775) but general business depression, as the Manager states, continued throughout the year.
44. Arrangements were made in August 1935 for the issue of through passenger tickets between Kowloon and certain Stations of the Canton-Sam Shui Railway.
45. In spite of a reduction during September of 2% in the fares of the combined rail and bus tickets referred to in last year's report (para. 23) revenue was maintained. The division sheets for these sections of the traffic were examined and presented no difficulty in audit.
46. The claims for haulage by British locomotives have been regularly met.
47. The store accounts were well kept throughout the year.
48. Thirteen surveys on the accounts of the Railway Head Office, Railway Stations and Stores were carried out during the year and call for no special comment.