OUR “SINKING FUND."

Patea Mail, 24 December 1880, Page 2

OUR “ SINKING FUND."

Out of one hundred thousand pounds receivable by Government for the Waimate Plains and Opunaki sections#, £25,000 will go to Now Plymouth for making a liarbor outlie sea coast. This money is taken from the Patea district, and appropriated to a local work in Taranaki which the Patea district does not want. Any interest which Patea settlors may have in that work is a forced interest. Besides this seizure of 25 per cent., a large portion of the district is also subject to a tax for sustaining the same Taranaki work. When the northern end of the Patea district wants another harbor, it will make one at Opunaki, within easy roach of the Plains. Yet these Taranaki politicians arc draining our district by a direct cash levy of one-fourth value of all land sold for settlement, and by a reserve power of taxation of twopence in the pound. How can it bo said that the Plains arc subject to a tax of only one shilling an acre ? The amount is really two shillings an acre, and may bo more as the value of land rises. There is nothing in the Ordinance limiting the rating power to a shilling an acre per annum. The popular idea on that point is a delusion. Clause. 21 in the Taranaki Ordinance of 1871 provides that the Harbor Board may levy a rate over the waste lands defined in a schedule, which schedule included all waste laud in the province then unsold ; and this rate is to provide a fund “to pay interest and sinking fund on any moneys raised by way of mortgage for the purpose of constructing a harbor at New Plymouth.” The Board were empowered to raise a loan of £350,000, and this rating power was to bo a security and a first charge on the land. The amount of the rate is clearly defined in clause 22 thus :

Such rate shall be levied on the value of tho lands, exclusive of all buildings, erections, aud improvements whatsover thereon ; provided that no such rate -hall in any one year exceed the sum of twopence in the pound of such value to sell.” There is no mystery about that. The rating power is not fixed at a shilling per acre, nor at two shillings, but is to rise with tho vising value of the hind. Then what is the value of the land ? It has averaged at auction, in the rough, nearly £7 an acre, and this in a period of depression. Tho same land would have averaged £lO before tho Maori ploughing and commercial depression In two years the Phdns land will probably sell at £9 an acre as the un improved value. Wo have heard of a farm in tins district changing hands privately at £ls an acre within the last month. Within five years from this date it is reasonably certain that the land sold last week will have a market value of £lO to £l2 an acre without reckoning improvements. What does that mean but a rate equal to two shillings an acre, at twopence in the pound ?

As to New Plymouth harbor r.qtiir-

ing the rate, the conditions are easy to estimate. Thu Hoard ; s hound by law to provide a sinking fund, in addition to paying interest on loan. The estimated expenditure for present work is £285,000. The borrowing power is £350,000, and about £30,000 will be received from the sale of Patea lands. Say a balance of £IOO,OOO remains out of which to pay interest. How can the public expect that the £IOO,OOO excess of capital over estimate for present work will remain unexpended? Is it not more likely that additional wants will lead to additional works? Is it not likely that the present plan of harbor shelter will prove seriously risky for ships in a gale, and that additional works in deep water will be projected as the only remedy ? It is a practical certainty that, if the works are to bo made sufficiently protective to shipping, they will require a farther expenditure to complete the present experimental plan. If the works cannot bo made fully protective to shipping so as to induce a large trade, it is a practical certainty the harbor will not pay working expenses, while the whole capital will then be a dead loss, to be covered by this taxing power over the Patea lands. Out of a total capital of £-100,000, there will be interest to pay on £350,000 ; and taking it at G per cent., the annual charge will be £21,000 a year, besides •63,500 a year fur sinking fund, this latter decreasing iufmitessimally each year. How can that harbor pay working expenses with cost of maintenance, and leave a chair profit of £2-1,000 a year ? The assumption is madness. The only thing, the only security that enabled the loan to be floated through the banks, was the statutory power of extracting 25 per cent, of the future land revenue, and the reserve power of taxation to 2d in the pound per acre. The Patea lands floated the loan, and the Patea lands taxation will have to sustain the inevitable collapse of this huge financial bladder.