The objects aimed at by this Committee are (1) to make the Management] of the Department stronger and more efficient and (2) to relieve the Council of responsibil To achieve these objects the Depart-be managed by a Committee who will be responsible for their conduct of the business, To secure efficient management of a manufacturing concern such as this the managers must be endowed with full power to exercise}, their discretion, and must be directly responsible for the manner in which that discretion is exercised. As long as they feel that there is another body—the. Council—to approve their acts, and, by approving, divided control makes it impossible to expect the best work, or the most satisfactory results, The keynote to the difficulties experienced in the past has been di responsibility, owing to the Elec: Comittee, the Council, the Electrict Department and the Secretariat and the Treasurer's Department all having a band in the administration, If this Report is adopted the members of the Electricity Committee will have to accept full and undivided responsibility for the successful working of the most important industrial undertaking in Shanghai.
Committee in accepting respon-must have a free hand in the selection and remuneration of their staff and that staff must be entirely under their direction and control.
The Committee mast provide for the department all that is required by the department—plant and machinery, land for substations or other purposes, buildings and so forth. If it is necessary to borrow the money to pay for these, the Committee must explain to the Ratepayers in its Budget reposals, what it wants to bay afd obtain permission to raise the necessary money. After the Rate, avers have sanctioned the borrowing for the purpose stated the Council has no more responsibility. The Committe will prepare its own budget, and submit it to the Ratepayers for, approval.
As the Committee has to manage the Department in such a way as to provide interest on the money borrowed and further a sufficient surplus to provide for depreciation, reserve, sinking fund and! so forth, it must have a free hand in selling its produce and fix its rates accordingly. The price at which light, power, or heat, can be produced depends on many factors and it is useless to expect the Committee to carry out its functions if the rates at which it recommends the products of the Department to be sold are subject! to alteration o revision by the Council. Where Public lighting or tramway power rates, or such like are concerned the Council being directly interested has of course to be consulted.
The tendency of the Committee will always be to aim at successful results mat as the Department is not a purely trading concern aiming at large profits, bat is municipal undertaking carried on in the best interests of the community as a whole and the consumers in in questions of principle or policy, such as supplies to extin-Settlement' consumers, and it must have control in all matters which will involve the pledging of the Community's credit in the future. Tt may often hajyen that the Committee is asked to contract for a supply of power which, though not beyond its te capacity, will at a future Wye outlay for additional plant. Before such a contract is entered the Council must be consulted, as it is Jo matter which may involve borrowing, jand should therefore be only entered into after the fullest consideration by both the Committee and the Council representing the ratepayers. It is obviously impossible to consult the ratepayers thereon and therefore the Council must accept this responsibility.
As the electrical borrowings will be charged on the whole manid al undertaking and will rank pari fassu with borrowings for general Municipal parposes the Council is directly i: terested (1) in secing that provision is made for ultimate repayment and for the maintenance of the security pending repayment (2) in seeing that no excessive) borrowings are permitted in any year Consequently it is for the Council to decide on the purposes to which the surplus profits should be devoted, so that it may see that ample provision is made for maintaining the security for such borrowings by depreciation funds, reserve, sinking funds, ete. It will farther have a say in how much shall be borrowed in view of the requirements for general municipal borrowings and the possible, though unlikely, issue of debentures in any year to an amount in excess of what the Public will readily absorb.
To sum up—the object of the Re-Rulations is to secure efficiency by iving full control to the Committee subject to the following safeguards (1) Those who exercise this, control are persons elected for the purpose by the Council and one or more members of the Council will sit on the Committee. volving fature borrowines have to be sanctioned by the-Council-in the first instance, and the borrowings if they become necessary, must of course be sanc~ tioned by the Ratepayers.
(4) The Council has control of the surplus profits.
(5) In matters involving principle or policy the Council has control.
The Commit ¢o is of opinion that the interests of the Council and of the Ratepayers will be safeguarded fully, while the strength and efficiency of the Department will be greatly increased, if the Department is managed in accordance with the accompanying Regalations,
Text read from the printed page and cleaned; old type leaves the occasional error.