WATERWORKS DEBENTURES.

Cromwell Argus, Volume VI, Issue 287, 12 May 1875, Page 6

WATERWORKS DEBENTURES.

To the Editor of the Cromwell Argus,

Sir,— My attention has been drawn in your report of the last meeting of the Cromwell Municipal Council to the above, and to the very generous (?) proposal of the Colonial Rank to take up the Corporation debentures at £43 10s. each, at 7 per cent., and 1 per cent, commission to cover the requisite charges for completing the transaction ; and I have been led to go into the matter to see how the Council will decide, and whether they can afford to accept the Bank’s proposal. The following calculation may open the eye* of the Councillors to the heavy charges they will have to pay if they accept the offer of the Bank:— Dr. To 40 debentures @ £SO £2OOO Cr. By Discount on 40 debentures at £G 10s, each £260 Interest on £2OOO at 7% 140 Charges on £2OOO at 1% 20 - 420 £ISBO being the amount the Corporation will receive for their £2OOO worth of debentures. As the Bank will, and rightly too, charge the annual interest on the capital sum of £2OOO, it will be seen that though the Corporation will have to pay interest on that sum, they receive only £ISBO, which raises the interest at once from 7 per cent, up to £8 17s. and a fraction, or a rise of 25 per cent, at a jump. Whether the Council is in a position to accept this expensive offer or not is their business, but they must remember that posterity follows, and that they will be held liable for squandering the property of the citizens. Trusting that the Councillors appointed may make better terms with the Bank than the above, I am, Ac., AOOOUiJTASX. civ-di*