The Seattle star. [volume] (Seattle, Wash.) 1899-1947, 1920-10-08


At this rate, the street railway would make
more than 100000 year-BUT, in addition
to the ACTUAL expense, the state bureau of
accountants charges S56,415.63 to deprecia-
ton.
1t is this depreciation charge which seems to be
the entire meat in the railway cocoanut! 1t is an
arbitrary charge The mayor says The previous
administration said so and never considered 1t at ALL
The Puget Sound Traction Co. never made "a depre-
citation charge in any such amount, the mayor
vouches.
Should this depreciation charge be considered in
Sudging whether the municipal railway is making
money or going behind?
SIN my opinion says the mayor, "we must adopt
policy of operation and bookkeeping that is either
the same as that followed by privately owned utility
companies, that is adapted to the unusual and
extraordinary thing that we attempting to do
namely, the retiring of capital investment at the
end of Is years"
THE MAYOR is to be congratulated upon his
frankness. In the municipal election last spring
he not quite so frank He led people to believe
that the former administration was to be severely
condemned because it did NOT charge this arbitrary
depreciation figure. Today he too is inclined to the
opinion that it is an extravagant charge.
And why?
Because the city railway department is spending every
keep tracks and equpmenand the depreciation of
the railway system naturally only be nominal under these
circumstances
THE WHOLE THING then, becomes a matter of book
i keeping If going to say arbitrarily that we
MUST charge $4,000 month for depreciation, whether
depreciation not whether spend twice that
amount to prevent depreciation not then the municipal
railway will show loss If not going TO place this
arbitrary burden upon the railway then there won't be
loss There will be gain instead, profit of more than
$500 900 a year, according to the mayors figures
To figure it otherwise borders the ludicrous The
mayor very apty has shown that the next 1S the
arbitrary depreciation charge would amount to than
S12 600 000 while at the time there will have been
spent the rate nearly S220O000 for the main
enance and upkeep of "a completely equipped and rehab
tated street car system.
Imagine the 18 years have passed. The spent
for upkeep of tracks, cars and equipment will give then
as good system, if not better than we have today
And the books of the municipal railway will show that the
city charged 600 for depreciation that
This and purely arbitrary depreciation
charge would be almost enough at the end of the Is years.
to pay off the cost of the railway SYSTEM
Is this then, any for pessmsm? On the contrary
the outlook optimistic if the mayors figures correct
UNITING the depreciation charge which IS arbitrary
" the figures presented by the mayor give reasonable
surance that the railway will produce net earnings in
amount 100000 per year.
This will not be enough it is true to pay off the bonds
which fall due in amount of $83300 per year We will
short approximately $500000 year But that doesn't
losing 100000 year. 1t merely
making big profit-as big net profitas would
like to. 1t that instead of making enough profit to
pay for the entire railway system 20 years it will take
80 or 40 1t will mean that viii have TO issue