THE ROOT OF OUR TROUBLES.

Auckland Star, Volume LV, Issue 211, 5 September 1924, Page 9

THE ROOT OF OUR TROUBLES.

(To the Editor.) Sir, —"Sine Nomine" resurrects a very old argument which I thought -was dead. Briefly, his contention is that the State might have done as well with the money it received for the land it sold, aa it would have done if it had leased the land instead. He asserts that compound interest bn the purchase price would nearly equal the increment in the land value. Perhaps it would, but that is only half the story. For instance:- 1 -"A" puts out £100 at 5 per cent compound interest and in about 28 years he has £400. "B" invests £100 in land, leases it for 28 years and at. the expiry of the period owns the land worth (ex hypothesis) £400. "A" has had his increment only; "B" an equal increment, L and his yearly rent besides, which latter he could also put out at compound interest and just about double. There- is therefore no question as to which is the better proposition. It is not difficult to see, that leasing would have' been infinitely preferable from the point of view of the State.—l am, etc., C.H.N.