USE OF SAVINGS.

Auckland Star, Volume LXVIII, Issue 127, 31 May 1937, Page 6

USE OF SAVINGS.

I have read P. B. Fitzherbert's letters in your issue of May 19 dealing' with the case of Smith and Jones, but after perusing' it three times I am still m doubt as to whether your correspondent is being funny or is in earnest in what ho savs —if the former, X apologise for biting. The case stated as I see it isj At the end of 20 years each has saved £500. Smith borrows Jones' £500 and pays him 5 per cent interest for 20 vears because he has debarred Jones from using that £500, and in consequence Jones has had to pay rent for a bouse to live in. To extend the case a little, does your correspondent suggest that if Jones had lent Smith the full to build a house, then Smith should have lived rent free in it at Jones' expense? For the claim is that the 5 per cent all goes in reduction of principal and nothing is paid for the use of the house (or money) during the period of repayment. To go a "step further, let us assume that Mr. Fitzherbert owns two houses, for each of which he paid £500 cash. One of these houses lie livo> in and the other ho lot* (or lends) to Smith for £25 per annum for 20 year*. Is he prepared to say at the end of that period that the house belongs to Smith? I think not. PL ATX FfOITtE S .