SOCIETY OF ACCOUNTANTS.

Dominion, Volume 6, Issue 1847, 5 September 1913, Page 10

SOCIETY OF ACCOUNTANTS.

' 1 SINKING FUNDS. A lecture on "Sinking Funds, National, and Local," was delivered by Mr. E. H. Hislop before a good attendance of members of'"the Society of Accountants, oil Wednesday evening. The speaker traced the evolution of the principles underlying the creation of sinking fluids. He pointed out that i their existence was m tlio interest of the nation or local body creating thorn, ; not of the creditor, though his position was incidentally affected. .Ho pointed l out the diifercnoe between loans raised for purposes which did not increase the borrower's revenue and those which did. It was an absurd tiling, lie said, to add to sinking funds while borrowing for other purposes. Much better save part of the expense of tho double operation mild apply out of savings part of tho cost of the new work. He reflected on tho crude condition of local borrowing. Take Wellington, he said, with its 30 loans with separate sinking hindsmaturing in such a way as to disturb ' the money market by the diversion of large sums from real investments hero ! to pay. creditors mostly resident abroad. 1 About £500,000 matured in ono .year, r The sinking funds were .invested direct> ' Iv or indirectly in real securities, and it 1 ivould bo impossible to withdraw so ' largo a sum without" disturbance. Tho 1 speaker mentioned ■ that ho had i the •' skeleton prepared of a Bill consolidate • ins tho loans with sums borrowed, pay- ■ 'aiblo at intervals of five years, with sink- • ing funds maturing; at like periods, and , he proceeded to point out at length tho i advantages of such a scheme in main--1 ta.ining stability. . Power to redeem i debentures below par out of sinking i fluids was also advocated..