Article 36.　Accounts and financial transactions of the Japanese National Railways shall be performed under the provisions of this Chapter.

Article 37.　The business year of the Japanese National Railways shall begin on and after April 1 of every year and shall end on March 31 of the following year.

2　The Japanese National Railways shall complete the settlement of account for every business year by July 31 of the following year.

Article 38.　The Japanese National Railways shall account for the increase, decrease and change of properties in accordance with the accrual basis, for the purpose of making clear the operational result and the financial state of the enterprise.

Article 39.　The Japanese National Railways shall prepare the budget for every business year and shall submit the same to the Minister of Transportation together with the documents concerning executive plan of the budget for the budget concerned, the documents concerning items to serve as a reference for the financial program, such as the operation program and the fund program for the business year concerned and the inventory, the balance sheet and the profit and loss statement for the business year before last.

2　The Minister of Transportation shall, when he received the budget submitted according to the provision of the preceding paragraph, send the same to the Minister of Finance if he finds it satisfactory after an examination.

3　When the Minister of Finance received the budget sent according to the provision of the preceding paragraph, he shall make the necessary adjustment after examination thereof and shall get the decision of the Cabinet meeting.

4　When the Cabinet decided the budget according to the provision of the preceding paragraph, it shall submit the said budget to the Diet together with the budget of the State.

5　The budget under the preceding paragraph shall accompany the documents prescribed in paragraph 1.

6　The form and the content of the budget under paragraph 1 shall be prescribed by Cabinet Order, and the procedure of preparation and submission of the budget under the same paragraph shall be prescribed by the Minister of Finance after consultation with the Minister of Transportation.

Article 39-(2).　The Japanese National Railways shall, in order to conduct actions to incur obligations besides those within the limits of the, amount of the budget of expense, secure in advance the decision of the Diet for them in the form of budget.

2　The Japanese National Railways may, in case of the urgent necessities such as the restoration of calamities, conduct actions to incur obligations, besides those provided for in the preceding paragraph, for every business year within the limits, of the amount of money decided by the Diet.

Article 39-(3).　A reserve fund may be established in the budget of the Japanese National Railways for covering the deficit in the budget of expense arising from unavoidable causes such as the increase of the amount of the business handled.

2　In case there arises deficit in the budget of expense directly necessary for the operation even after the reserve fund under the preceding paragraph was expended, the Japanese National Railway may expend the amount equivalent to the excess in the income due to the increased amount of the handled business over the estimated amount of incomes, for the expenses directly necessary for the operation, in accordance with the provisions of the budget.

Article 39-(4).　The decision of the budget for the Japanese National Railways shall be made in accordance with the example of the decision of the budget of the State.

Article 39-(5).　When the budget for the Japanese National Railways was decided by the Diet, the Government shall notify that effect to the Japanese National Railways without delay.

2　The Japanese National Railways shall not execute the budget unless the notification is received under the provision of the preceding paragraph.

3　When the Government has made notification to the Japanese National Railways under the provision of paragraph 1, the Government shall notify it to the Board of Audit without delay.

Article 39-(6).　The Japanese National Railways may, only when it is necessary on account of unavoidable causes arising after the preparation of the budget, prepare a supplementary budget and submit the same to the Minister of Transportation together with the documents concerning executive plan of the budget for the budget concerned, the documents concerning items to serve as a reference for the financial program such as the operation program and fund program.

2　The provisions of Article 39 paragraphs 2 to 6 inclusive and the preceding two Articles shall apply mutatis mutandis to the supplementary budget under the provision of the preceding paragraph.

Article 39-(7).　Except the case under paragraph 1 of the preceding Article, the Japanese National Railways may, when it is necessary to make changes to the budget already decided on account of causes arising after the decision of the budget, revise the budget and shall submit the same to the Minister of Transportation together with the documents concerning executive plan of the budget for the budget concerned, the documents concerning items to serve as a reference for the financial program such as the operation program and the fund program.

2　The provisions of Article 39 paragraphs 2 to 6 inclusive, Article 39-(4) and Article 39-(5) shall apply mutatis mutandis to the revision of the budget under the provision of the preceding paragraph.

Article 39-(8).　The Japanese National Railways may, as necessity demands, prepare a provisional budget for a certain period within a business year and submit the same to the Minister of Transportation together with the documents concerning executive plan of the budget for the budget concerned, the documents concerning items to serve as a reference for the financial program such as the operation program and the fund program.

2　The provisions of Article 39 paragraphs 2 to 6 inclusive, Article 39-(4) and Article 39-(5) shall apply mutatis mutandis to the provisional budget under the provision of the preceding paragraph.

3　The provisional budget, shall become null and void upon formation of the budget for the business year concerned and the expenses made or liabilities incurred based the provisional budget shall be deemed as to have been made or incurred based the budget for the business year concerned.

Article 39-(9).　The budget of the Japanese National Railways shall be executed under the classification prescribed in the executive plait of the budget submitted to the Diet together with the budget of the Japanese National Railways.

Article 39-(10).　The Japanese National Railways shall not expend the budget for the purposes other than those provided for in the budget concerned.

Article 39-(11).　The Japanese National Railways shall not transfer the amount of appropriation designated by the budget unless approved by the Minister of Transportation.

Article 39-(12).　The Japanese National Railways may carry forward and expend in the following year the amount of expenses, out of the budget of expense, for the contract or other act to cause expenses which was made. within the business year concerned but for which liability for payment did not accrue within the same business year.

Article 39-(13).　When the Japanese National Railways shall expend the reserve fund or carry the budget forward, the Japanese National Railways shall notify the Minister of Transportation to that effect without delay.

2　When the Minister of Transportation received the notification under the provision of the preceding paragraph, he shall notify the Minister of Finance and the Board of Audit to that effect without delay.

Article 39-(14).　The Japanese National Railways shall prepare the fund program concerning the execution of the budget decided by the Diet for every quarter and shall present it to the Minister of Transportation, the Minister of Finance and the Board of Audit. In case where changes are to be wade therete the same shall apply.

2　In the event that the fund program presented in accordance with the preceding paragraph cannot be executed due to the actual situation of funds of the State, the Minister of Finance shall notify through the Minister of Transportation the Japanese National Railways of the extent that can be executed.

3　Ths Japanese National Railways, upon receipt of the notification under the preceding paragraph, shall revise its fund program.

Article 39-(15).　The Japanese National Railways shall report monthly, in accordance with the form prescribed by Cabinet Order, the amount of obligation incurred on account of contracts and other acts to cause expenses as well as the sums of actual income and expense to the Minister of Transportation, the Minister of Finance and the Board of Audit.

Article 40.　The Japanese National Railways shall prepare the inventory, balance sheet and the profit and loss statement for every business year and shall submit them to the Minister of Transportation for his approval within a month after the completion of the settlement of accounts.

2　When the approval is given by the Minister of Transportation under the provision of the preceding paragraph, the Japanese National Railways shall notify the inventory, the balance sheet and the profit and loss statement thereof publicly.

Article 40-(2).　The Japanese National Railways shall prepare the report on settlement of account for every business year in accordance with the classification of the budget and shall submit the same to the Minister of Finance through the Minister of Transportation together with the inventory, the balance sheet and the profit and loss statement for the business year concerned.

2　When the Minister of Finance received the report on settlement of account under the provision of the preceding paragraph, he shall send it to the Cabinet.

3　The form and content of the report on settlement of account under the provision of paragraph 1 shall be prescribed by Cabinet Order.

Article 40-(3).　When the Cabinet received the report on settlement of account of the Japanese National Railways under the provision of paragraph 2 of the preceding Article, the Cabinet shall send it to the Board of Audit by November 30 of the following business year.

2　The Cabinet shall submit the report on settlement of account of the Japanese National Railways audit audited by the Board of Audit to the Diet together with the attached documents designated by preceding Article paragraph 1, and with the settlement of revenues and expenditures of the State.

Article 41.　In case there are any profit in the management of the enterprise, the Japanese National Railways shall, if there be any loss carried forward from previous business year, devote such profit for covering the loss carried forward.

2　In case where balance still remains of such profit in the Japanese National Railways after covering the loss carried forward pursuant to the preceding paragraph, such balance of profit shall be paid into the General Account of the Government, excepting the case prescribed otherwise by the budget.

Article 41-(2).　In case there are any loss in the Japanese National Railways, the Government may, if it deems there is special necessity, make a grant within the limit of the amount of the said loss.

Article 42.　The Japanese National Railways shall deposit the cash for the business with the Treasury; provided that, for the purpose of security of handling of cash where no branches or agents of the Bank of Japan are readily available, it may also deposit the said cash with the post offices or private banks within such the limits as prescribed by Cabinet Order.

2　The Government shall pay a reasonable interest according to the prescription of the Minister of Finance on the money deposited with the Treasury under the provision of the preceding paragraph.

Article 42-(2).　The Japanese National Railways may make long-term borrowings and temporary borrowings from the Government with the approval of the Minister of Transportation. The Japanese National Railways may issue "Railway bonds" with the approval of the Minister of Transportation.

2　The maximum amounts of the long-term borrowings and the temporary borrowings and "Railway bonds" under the provision of the preceding paragraph shall be decided by the Diet in the budget.

3　The temporary borrowings under the provision of paragraph 1 shall be redeemed within the business year concerned:provided that in case the redemption thereof is impossible on account of the shortage of the fund, conversion may be made only for the amount not to be redeemed with the approval by the Minister of Transportation.

4　The borrowings converted under the provision of the proviso to the preceding paragraph shall be redeemed within one year.

Article 42-(3).　The Government may loan the long or short term fund to the Japanese National Railways or purchase "Railway bonds" .

Article 42-(4).　The Government may permit the temporary use of the Treasury's cash available to the Japanese National Railways only within the business year concerned, instead of the loan of the short-term fund prescribed in the preceding Article.

2　A reasonable interest as prescribed by the Minister of Finance shall be paid on the amount of money permitted to be used temporarily under the provision of the preceding paragraph.

Article 42-(5).　The Japanese National Railways shall prepare the program for redemption of the long-term borrowings and "Railways bonds" and have it approved by the Minister of Transportation every business year.

Article 43.　The Japanese National Railways shall establish the accounting regulations regarding its account besides the provisions of this Law and Cabinet Order based on it.

2　The accounting regulations under the preceding paragraph shall be established in order to contribute to the efficient operation of the railway enterprise and to appropriate execution of the budget in view of the public nature of the Japanese National Railways as a public corporation.

3　When the Japanese National Railways intends to establish the accounting regulations under paragraph 1, it shall get the approval by the Minister of Transportation concerning the fundamental items. In case of the change thereof, the same shall apply.

4　The Japanese National Railways shall, when it has established the accounting regulations under paragraph 1, notify thereof to the Minister of Transportation, the Minister of Finance and the Board of Audit without delay.

Article 44.　The Japanese National Railways shall establish the pay plan concerning the pay to officers and personnel thereof. In this case, the expenses for one business year in accordance with the said pay plan shall not exceed the amount appropriated for the pay in the budget for the same business year approved by the Diet.

Article 45.　The Minister of Finance may, if he deems necessary in connection with the execution of the budget of the Japanese National Railways, ask for the report concerning income and expense and make the field inspection concerning the condition of execution of the budget.

Article 46.　The Japanese National Railways shall not transfer, exchange, or pledge the working line or important properties similar thereto, excepting the cases provided for by law.

Article 47.　As for the approval under the provisions of Article 39-(11), Article 40 paragraph 1, Article 42-(5), Article 42-(2) paragraph 1 and the proviso to paragraph 3 of the same Article and Article 43 paragraph 3, the Minister of Transportation gives it after consultation with the Minister of Finance.

Article 48.　Persons who have been appointed as officials to make contract by the President, Vice-President or Managers (hereinafter to be referred as the "President or others" ), concerning the conclusion of contract, persons who have been appointed as officials to order receipt and disbursement of cash by the President or others, concerning the claim for payment to the obligers, persons who have been appointed as officials to make receipt and disbursement of cash by the President or other (hereinafter to be referred as "cash accountants" ), concerning the disbursement and receipt of cash, persons who have been appointed as officials to make receipt and supply of goods by the President or others (hereinafter to be referred as "goods accountants" ) concerning supply and receipt of goods, shall respectively represent the President or others.

Article 48-(2).　In case where cash accountants or goods accountants have lost or damaged cash or goods in their custody owing to neglection of good custodian's duty and caused loss or damage to the Japanese National Railways, the President shall order them to compensate the loss or damage.

2　The cash accountants or the goods accountants who where ordered to compensate the loss or damage in accordance with the provision of the preceding paragraph, may request the examination of the Board of Audit, in case where they believe there are reasons for them to be exempted from the responsibilities;provided, however, that when five years have elapsed since the time when they were ordered to conpensate, this shall not apply.

3　In the case under the preceding paragraph, if the Board of Audit decides after examination that the cash accountants or the goods accountants have no responsibility for such compensation, the President shall cancel the order commanding compensation, and the already paid compensation money shall be returned without delay.

Article 49.　In case where Japanese National Railways makes or enters into a contract for purchase, sale, loan, hire, contract for work or any such agreement, the Japanese National Railways shall publicly notify of such intended contract and invite competitive bids from the public in general, and such contract shall be awarded to the lowest or the highest bidder or to the persons on the basis of fair negotiation with competitive bidders concerning the prices and other conditions. The provision, however, shall not apply to the case where there is urgent necessity, to the case where it causes disadvantage to make a contract corresponding to the method of open competitive bid, or as provided for by Cabinet Order.

Article 50.　The accounts of the Japanese National Railways shall be auditted by the Board of Audit.

Article 51.　As for the establishment and change of the passenger fares and freight charges of the Japanese National Railway, the provision of Article 3 of the Finance Law (Law No.34 of 1947) and the provisions of the Law concerning the exception to Article 3 of the Finance Law (Law No.27 of 1948) shall apply mutatis mutandis.