REMARKABLE SCHEME.

Dominion, Volume 3, Issue 890, 9 August 1910, Page 5

REMARKABLE SCHEME.

I THE SINKING FUND PROPOSALS ■ A SHARP CRITICISM. ,( : i■. The Sydney "Bulletin , '- of August 4 has. (mother editorial on Sir' J. , G.' Ward'a "einking fund" 6cheme..' The idea was so . utterly unlike Sir Joseph, tho "Bulletin". ; observes, "that everybody -trio knew Win ■ expected to find it loaded, and . these; ' people are not disappointed." The article. proceeds:— . ... ■ ': , ' . "In the first place, the'sinking fund arrangement doesn't apply to. quite all .fflio debt. By some murky process of 'transfer--1 tho Government has found justification ■ for paying off only ,£60,000,000 instead of 1 the actual or .£72,000,000. Then ' the floating of now loans is to go on gaily as per usual. These tyro • matters being understood, the actual sinking fund question comes on the board, A certain sum— " the amount which the.. Controller and , Auditor-General shall declare to bo no- , cessary—is to be paid each year to. the sinking fund commissioners.. Having got the money in hand there seems to bo threo courses naturally, open to tho. comniis- ■ sioners, though, curiously enough,, thej . are to take none of them. They might 1 buy up some of the new loaa which New Zealand is going to issue regularly as aforetime, though the proceeding would' be rather an absurd, sort of business; but as that would to some extent diminish the influx of foreign.oash on wlioh Sir Joseph Ward has built his boom, it is not going to bo done. Then they might in- , vest the money by taking up part of the renewal loans which New Zealand, has to float every year, by reason of the beastly habit of falling due with which the old loans are afflioted; but that would also bo sending some money out of tho country, and Sir Joseph Ward wants to keep ■all the money in. the country to booia with. So that device is also ruled out. Tho Commissioners are not even to buy up Government seourities .in the opei market. Sir Joseph Ward's roally brilliant idea is that tho sinking fund money., is to be invested in loons to settlers, local bodios and 60 on, for .terms extending up to forty years. And apparently it is only when the money comes back from these loans tluit tho real repayment of the debt is to commence. A scheme like that is liable to break up rather badly. ! It is one thing to withdraw,', say,. ,£800,006 a year from the country aad apply it to tho repurchase of Now Zealand securities in England. It ie quite another thing .to invest, say, .£BOO,OOO every year for perhaps 25 years in local land-booming, and then when there is or J225,000,000'invuntcd in tho boom to.try to get it out. so as to pay off £20,000,000 "or ,£25,000,000 of debt in a heap. The attempt t» ■realise .£20,000,000 out of a big boom ie more likely to yield id 0,000,000 worth o£ smash than JE20,000,000 of cash. The business ie all a juggle and a postponement. Sir Joseph Ward himself is to go on borrowing for productive works and unproductive works. He will probably boT-roiV; enough for wholly unproductive works—the kind which should clearly bo paid for owt of revenue—to cover his payments to the. sinking fund—in other words,' ho will probably borrow the sinking fund money. He will use the sinking fund to keep up his boom, and years hence, when Sir Jowph Ward is politically gone, it, wjtt be someone elso's job to fry and extricate tho hard cash out of tho boom and start making the actual repayments. A marvellous financier is Sir Joseph Ward. Hie motto seems to be 'Things will lost my time.'" ~■■■'. ■.■'■" .