326 development will come & great increase in the variable working expenses then this factor of fixed expenses will become comparatively un- -important.
For these reasons, I am of opinion that this factor of the *fixed charges" should be eliminated from the argument altogether. The comparative statment based on the figures for capital costs &c., of the British Section and on the rates of 90 cents and 30 cents færes would then be as follows:
Chinese Section.
Capital Costs.
Cross Earnings
.815,130,000.
British Sectn.
210,533,000
..985.500
Torking Expenses British Section..........
do. Chinese Section?
328,500
207,000
828,000
$207,000 x 4 n
$107,500
1 %
$121,500.
1.15%%
which works out more favourably to the British Section than to the Chinese Section. I consid r, however, that the comparative proportions of orking Expenses to Cross Receipt given in paragraph 5 of my Memorandum are more probable than the above. ilovever the principle is
the se.
In conclusion I would state that I am still of opinion that the principle I have claimed in my previous mezorandum is the true principle on which should be based the propo tion of through fares due to each section and that the proportions which I have worked out from this principle are equitable, therefore I beg that you will be pleased to reconsider these questions again and make
equitable
the necessary reductions.
An early reply will be greatly obliged.
Yours sincerely. (Sd.) (nao Ching Hua,
Acting Lanaging Director.
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