The Sun.
London, England, 1850-01-30 00:00:00

" REVENUE ACCOUNT.

"Traffic.—The t )ttl receipts for the half-year have
been 286,3581., showing an increase of 27,7551 over the
corresponding half-year of 1848, of which, however,
3,3851. is for cartage in collection and delivery of goods,
which has been undertaken by the company since March,
1849, and therefore forma no feature of comparison. Ex-
cluding this item, the increase for the half•year over the
corresponding half-year of 1848, has been 24,3701., or at
the rate of 9} per cent. Of this increase 14,0001., or at
the rate of seven per cent., is on the ordinary pas-
senger traffic; 1,8531., or 31 per cent. on the receipts
from periodical tickets; and 8,3701., or 24 per cent. on
the goods traffic.
" The regular increase of traffic, since all the principal
portions of the present system of lines belonging to the
company were completed, has been very satibfactory.
The net amount at the credit of
the revenue account for the half-
year i 5......

£187,970

Whereof is appropriated for interest
on loan capital ... £32,884
60,770
For dividend on preference share
capital ... ... 27,886

Leaving a balance of ... .£127,200
" This balance would give a dividend of 2/. 15s. per
1001., on the ordinary capital, making the total dividend
earned in the year 1849 at the rate of 41. 4s. per cent.,
but for the reasons stated in their last report, the di-
rectors strongly recommend that a sum of 15,0001. should
be set apart towards a reserve fund out of the disposable
balance. This will leave 112,2001. available for divi-
dend on 4,615,6341. of ordinary capital, out of which the
directors recommend a dividend of 21. Bs. per cent. for
the half-year, amounting to 110,7841., leaving a balance
to the credit of the current half-year of 1,4161.
" The directors recommend that the reserve fund and
the interest accruing thereon should be invested, from
time to time, in the company's debentures, or other ap-
proved securities, and kept quite distinct from the other
accounts of the company; and that no transfer from the
reserve fund, in aid of any account, should be permitted
without a special resolution of a meeting of the pro-
prietors.
" The total provision against depreciation made in the
year 1849, including the sum actually expended and that
proposed to be set aside as a reserve, will amount to
34,9271. The line is in good order, and the working
stock is larger and more efficient than at any previous
period.
" At the last half-yearly meeting a traffic arrangement
was sanctioned with the Direct Portsmouth Railway
Company for working the short portion of their projected
line between Epsom and Leatherhead. The construc-
tion of this portion by the Direct Poi tsmouth Company
having been prevented by an injunction in Chancery,
the arrangement has fallen to the ground, and the Direct
Portsmouth Company are applying to Parliament for a
Bill to abandon the undertaking. Under these circum-
stances the directors do not recommend the proprietors
to take any further steps in reference to the matter.
" The sum advanced by the London, Brighton, and
South Coast Railway Company to the Brighton and
Continental Steam Packet Company, has been repaid.
" Two vacancies having occurred in the direction in the
course of the past half-year, by the sudden and lamented
deaths of John Lawrie, and William Cash, Esqs., they
have been filled by the election of Beaumont Hankey,
Xsq., and Charles Lushington, Esq., M.P.
" Leo Schuster, Esq., John Nix, Esq., and Charles
Lushington, Esq., M.P., retire by rotation, and being
eligible for re-election, offer themselves accordingly.
John Urpeth Rastrick, Esq., has also declared himself a
candidate."
The report of the professional accountants on the ac-
counts for the half-year ending 31st December, 1849,
was as follows:
" Having completed our audit of the accounts of your
company for the hall-year ended 31st December, 1849,
we beg to report to you the result of our labours.
" We find the published statements, intended to be
laid before the shareholders on the 29th inst., to be in
due accordance with the books of the company; and that
the books themselves are adequately supported by
original vouchers; in the instances of payments for land
purchases, the deeds of conveyance of the several pro-
perties have been produced to us.
" We have not failed to consider the appropriation
made of the half-year's expenditure under the several
heads of capital and revenue; and we find the accounts
to be correctly kept and stated in this respect, subject
nevertheless to the following question, which appears to
us to involve an important principle, and which we
submit for consideration.
"The question we allude to is, whether the sum charged
to revenue for repairs and renewals of rolling stock, is
as equivalent for the amount of loss occasioned by the
traffic? The principle acted upon by this company, in
order to provide such equivalent, being to maintain the
efficient value of the stock out of revenue, by means of
repairs, renewals, and additions, and not by means of a
reserved fund; it is of especial importance that no ex-
penditure of that sort be charged against capital that
does not effect a positive addition to the stock, over and
above its restoration, out of revenue, to a state of com-
plete and original efficiency; upon what is the fact in
t his respect, appears to us, to depend the propriety or
otherwise of charging to capital the cost of three
new engines and tenders (about 6,0001.), which have
been received int istock during the half-year. It appears
to us an essential condition of the safe working of the
principle adopted by the eompany, that the capital should
not be charged with the cost of new engines, that do not
form an addition to the number originally possessed by
the company, and charged ti capital account; according
to this view, the cost o the three engines in question
should be ~!harg,tt.d to revenue, inasmuch as (we are given
to underst tad) t%ey do not equal the number of engines
which have tee i worn out and destroyed.
In connexto and as illustrative of this ques-
tion, we notice the fact, that one locomotive engine has
beo broken up during the half-year.
" With respect to the sums charged to capital for
timber trucks, coal waggons, and for stock for collection
and delivery of goods, we aro it.fonned that they consti-
tute additions t ) the stock, which have been rendered
necessary by the increasing goods traffic of the company.
" Under the head of Cart iage and Waggon Repairs,
the 2,tual half-year's outlay is diminished in the ac-
counts to the extent of something short of 1,0001. Tbis
arises in consequence ( f the stock of stores belonging
to that department having been more fully and accu-
rately taken than formerly. The effect of that proceed.
ing is properly enough set forth under the head of
Revenue. We notice the circumstance as one which
affects the view of the net earnings of this particular
half-year.

" We aro pleased to have it in our power to state that
the accounts of the company are kept with great care
diligence, and intelligence, and altogether reflect the
greatest credit on the officers concerned in that depart-
ment of the company's business."
The CHAIRMAN pointed out to the meeting that the
professional accountants had not contented them-
selves with simply auditing the figures in the ac-
counts, but they had gone into the question of expe
diency in the expenditure, and the mode of keeping
the accounts. The result of their inquiry must be
as satisfactory to the shareholders as it was con-
firmatory of the soundness of the policy ',which the
directors pursued in keeping the accounts. With
regard to the paragraph in the last report, relating to
the engines, he maintained that they had been pro-
perly charged. At present the company had 115
engines, considerably more than was necessary for
the efficient working of the line, and some of them
were now for sale. The directors, therefore, had
charged the actual stock in use to revenue, and that
was all revenue could be expected to bear, for when
the surplus stock of engines was sold, the amount would
be written off against capital and not against revenue.
The fact of their being overstocked with engines
arose out of past mismanagement, before he
became connected with the line, and he could not be
held answerable for it. The proprietors would per-
ceive by the capital account, that a sum of 7,200,0001.
would be more than sufficient to complete all the
works of the line, and close the account altogether,
and he could assure the shareholders that the opinion
thus stated in the report was founded upon accurate
and unquestionable data. At a former meeting the
directors gave an estimate of the amount that would
be required to complete all their works. That esti-
mate had already been exceeded by some 44,000/ ,
but still the directors were prepared to pledge .them-
selves that the capital account could be finally closed
with an additional expenditure of 7,200,000/., and
leave a sufficient margin in surplus land, to provide
for contingencies. He fully anticipated that be-
fore the year closed they would be in a position to
< aulaseks. 9rp,cipion for the whole of their loan-capital,
--7- at 4—rateor___tiltirest not exceeding four per cent.,
and4/s,V.refen n future their being overtaken by
=OF ECerisifOie hat which occurred in the year
1.84$1; 'The ;-' ctors had gone through the
- - ._.receit3t3l:444lt , diture of recently opened lines,
'.-* - whish-Wfir#7 e always looked upon as incubi
-- _ v_
4,,,d,._ a 9