The Dominion. MONDAY, AUGUST 22, 1910. DEBT EXTINCTION EXTRAORDINARY.

Dominion, Volume 3, Issue 901, 22 August 1910, Page 6

The Dominion. MONDAY, AUGUST 22, 1910. DEBT EXTINCTION EXTRAORDINARY.

> ■ i ~. The impression which has prevailed amongst the bulk of the public up to Friday last in connection with the Prime Minister's Debt Extinction scheme has been that the Government was going to make a great sacrifice by providing about £150,000 a year of new money for the redemption of the Dominion's debt somewhere about 1985. Indeed, the Ministerialist journals, whom Sir Joseph will probably not care to accuse of stupidity, went into raptures over this sacrifice, and urged the public to brace itself to the new effort, to bear the burden cheerfully, and in effect to give three hearty cheers for the .heroic saviour of the country. A few more cautious. people saw- that, as outlined, the schema would simply mean .that the "sinking fund" would be built out of borrowed money, and, amongst others, we have gone, to some pains to point this out. Apparently these criticisms troubled the Prime Minister even more than could have been expected. He deemed it necessary on Friday night to make some sort of attempt to show that the "sinking funds" .would not he borrowed, and in making this attempt he succeeded in showing that, his Public Debt Extinction scheme is practically nothing more than a rearrangement of the existing sinking fund accounts, plus a trifling annual contribution, which is so ludicrously small as to completely shatter the impression previously sought to bo conveyed. This wonderful plan seems to consist in setting aside nothing moru than an additional £12,000 a year! "The excess amount to be found," he said, "would be only £12,000 a year," At the present time wo. are actually paying £52,358 to the Pub-lic-Trustee as a sinking fund' on moneys borrowed for loans to local bodies, and £39,350 to extinguish war loans. In addition, £36,800 in' intorest ; is accruing every year on the £922,000 of sinking funds already accumulated in the hands of the Public Trustee. These sums amount in the aggregate to £129,108. It is now proposed to discontinue these payments to the Public Trustee and to pay them to the Sinking Fund Commissioners. Add £11,392 out of. the Consolidated Fund, says the Prime Minister, and you get a sinking fund of £140,500 per annum. The public is notoriously not fond of figures, but there can be nobody so dull as not to see that this extraordinary scheme'is simply a proposal to pay off the public debt by going on just as. usual, with this difference, that a small annual payment will be 'added and the Public Trustee will be relieved of some of his tiresome, duties. The great act of statesmanship turns out to consist of nothing (beyond the paltry £12,000 a year) but the purchase of a new cash-book, or the employment of Smith to,do what Jones used to do. To be sure, thoro is a fresh £12,000 a year to be found. ; The _ great new sacrifice which a heroic Government confidently asks a lion-hearted nation to make in order that . the existing debt may he extinguished in 75 years is—£l2,ooo! Future loans will of course under the scheme carry an annual charge for sinking fund of £2300 for every million borrowed. So far as the existing debt is concerned, however, this great scheme which has been announced with such a blare of trumpets crumbles away, on the Prime Minister's ownshowing, to the insignificant proportions stated. In the circumstances, wo would suggest that Sir Joseph \Vard_ might win even- greater plaudits from his friends by going a step further. He might extend the term of repayment to 80 years instead of 75; for then—as a little sum in arithmetic will show—we should not have to pay even the £12,000 a year. The new cash-book, and the employment of Smith instead of Jones, would (if the funds were not diverted in the meantime)extinguish the existing debt without any additional contribution from anybody. ■