ABSTRACT
We have taken the liberty to reproduce in our columns an article contributed by Mr. Alderman King of Manchester, to the Gas World, on the above subject. So far back as the 3rd September last we mentioned that the important matters with which the article deals, were likely to become questions for serious discussion, and in our issue of 12 November, 1887, incidentally referred to the erroneous and misleading manner in which the sinking funds, and their operation and effect, were set forth in the Manchester Corporation Accounts. We have, therefore, been pleased to read what is undoubtedly a most able statement of the views of one who may be taken as the spokesman of those who oppose the opinions held by some members of the Manchester City Council; Mr. Adam Murray amongst others. Succinctly stated, it is, as we understand it, the opinion of the latter that where the capital for the erection of (in this instance) a municipal gas works has been raised by borrowing, and the borrowed capital is being repaid by a sinking, or similar fund, at such a rate that, reasonably speaking, the period over which the repayment is spread will not exceed the duration of the works, it is neither necessary nor just, that what is ordinarily called depreciation should be charged against the profits. Mr. Alderman King-disputes that view, holding that depreciation, and the liquidation of debt, are two quite different things, wherein we agree with him; and that profit and loss accounts in which both are charged are, in principle, sound; upon which we respectfully differ from him.
