The Lyttelton Times. WEDNESDAY, FEBRUARY 14, 1866.

Lyttelton Times, Volume XXV, Issue 1613, 14 February 1866, Page 2

The Lyttelton Times. WEDNESDAY, FEBRUARY 14, 1866.

Ok Saturday last, Mr. Travers gave to the public, through our columns, his calculations of the difference of cost between the system of borrowing upon the security of the Waste Lands and hi* proposed system of selling portions of the land at a reduced price. With a real desire to do justice to any proposal intended to promote the welfare of the province, we have examined Mr. Travers's figures carefully and repeatedly. We have consulted experienced accountants and mathematicians ripe from the University. We have. invited suggestions from politicians, sheep-farmers, and speculative land buyers. And we have now to confess that the conclusions of Mr. Travers remain quite unintelligible to us and to all whom we have consulted. Some distance down the figures, indeed, an acute observer may go with understanding, but the remainder is Intricacy itself: worse than a puzzle, it is a chaos of figures. Perhaps, if we point out how far we can follow Mr. Travers, and where we lose his meaning, that gentleman will put his calculations into a shape which may not be oaite so mystifying. Mr. Travers would sell a million of acres for £1,000,000. He would pay 8 per cent.,or £80,000, as compensation to the runholders for being bought up. That is, he would nett £920,000; and as compared with selling the same land at £2 an acre, he would submit to a loss of £1,000,000. But in borrowing £1,000,000 at six per cent, he says that, as two per cent sinking fund would pay off a loan in twenty-five years—a little too favourable to the loan, by the way —eight per cent, or £80,000, must be paid every year for that period. At the ■ame time the pasturage rents would be gained to the province over the million acreor €6250 for the first seven years, £10,000 for the second seven, and an unknown quantity for the remainder of the period. Mr. Travers calls the period 23£ years; so the in-1 terest and sinking fund payable would be £1,880,000 in all; and after deducting the Raving in rents, the cost of the loan in put down at £1,766,250, less the above mentioned unknown quantifc& Bp,much for the mere arithmetic. Now* for the comparisons. Mr. Travers shews that the loan would cost in fourteen years £1,006,250; and he gayn tbat thiK is £6250 more than the loim by selling a million acres at £1 iuutead of £2 an acre. The comparison fails;' for on his plan

a million acres must have been sacrificed to produce the result; ohthe other little over half that quantity of land need have been sold. The loan Byeteni is the better, hif ihowibg, at the end ; of fourteen years, by '496,825 acres of land.eaved to the province,'as well as the principal sum *>££80,000, whicTi he would nay away in compensation to the runholders. From this pgint the clue to the calculations fails us. Mr. Travers adds his gains to his losses; and leaves the total for public inspection, we presume, since nothing, more is done with it. Then he subtracts the principal of the loan from the accumulated interest in 23£ years, and brings out the remainder, subject to a further subtraction of an indeterminate sum of money. And then he balances the sum of the additions on one side against the result of the subtractions on the other, and leaves the reader to his own conclusion; which, so far as we can understand, may be one of several. Either Mr. Travers's scheme wins £766,250, which is not likely; or it loses £1,233,750, which, as the account is stated, is the apparent result; or else it is worse than the loan system by 116,876 acres of land, which we take to be the most like the truth. All these conclusions are modified by the indeterminate quantity, which Mr. Travers seems purposely to have left uncomputed, in order to complicate the calculation more completely. The comparison may be put, we think, more plainly than Mr. Travers has stated it, and a real result arrived at. We are dealing with a somewhat theoretical matter, namely, the system of loan against that of sale at halfprice. We assume therefore that Mr. Travers really sells his land, and that debentures really go off at par, in order to compare the result of one operation with the other. Mr. Travers sells a million acres, and grosses £1,000,000. But he pays compensation at eight per cent., or £80,(KK). And he loses the pasturage rents, which increase from £6,250 to £10,000, a yearandthen to an unknown quantity. We do him full justice by averaging them at the middle figure, and calling them £10,000 a year, to sacrifice which is equivalent to losing a capital sum of £125,000 at eight percent. Mr. Traversnetts,accordingly, his £1,000,000, less £80,000 and £125,000; or £795,000 as a total sum. Now, if we want to borrow £795,000, we must pay six per cent, interest and two per cent, sinking fund, or £63,600 a year, which in 25 years (we adopt a more unfavourable period than Mr. Travers has granted) amounts to £1,590,000, or the proceeds of 795,000 acres at £2 per acre. But in selling this acreage, we must admit a proportionate loss on the pasturage rents, not occurring all at once, but distributed over the 25 years. We take the same rate as on the other side, namely one pound per hundred acres, and charge it on 795,000 acres for 12£ years in order to obtain the correct result. This shews a further loss by loan of £99,375 in all, or 49,688 acres more necessary to be sold. The land to be disposed of on the loan system is, therefore, 844,688 against the Million required by Mr. Travere's system, being a saving to the province of 155,312 acres. We shall be told, of bourse, that the best land will be sold in one case and inferior land in the other. But we answer that a great deal of the hill country which Mr. Travers proposes to sell at £1, is saleable now at £2; and that the lapse of time and the works executed will render most of the remainder of equal value. The husbanding of the inferior land is a matter of policy not to be overlooked. As roads and railways are made the value of the hill country will increase. We would make the works first, and get the best price afterwards. Mr. Travers would sell at the lowest value, and' improve for the purchaser's benefit.