The Treasurer and Controller disagreed with this policy, which, by: continuation of excessive depreciation charges, would in effect create an independent reserve. In his opinion the technically correct method would be to write down the book values ct the relative assets to the actual ascertained cost. In practice, however, ft" would be sufficient to. attain game end by placing the $3,000,000 credit of a Depreciation Reserve Account to be absorbed by annual transfers of an equitable amount, roughly $150,000 to the credit of Depreciation Account, thereby reducing the charge against the tariff under that heading. past excess depreciation be adjusted in the accounts for; 190 of 1985. This would not_impair the financial position of the Company. Long before the depreciation reserve was exhausted the Company could, by means of the 2 per transfer to Reserve allowed in the agreement, build up a reserve fund greatly in excess of the amount under discussion. In regard to the management fee of 43 per cent. on gross Fevenue, payable to the International Telephone and Telegraph Corporation, the Treasurer and Controller referred to his previously expressed opinion that it was an unduly heavy burden on' the Seanghai He had ascertained that the fee related particularly to technical and professional and other services neces: sitated by the change over to the automatic system, and he was not convinced that the whole amount, roughly $300,000 per annum, should lurider normal operating conditions passed on to subscribers charge on the tariff.
Text read from the printed page and cleaned; old type leaves the occasional error.