SINKING FUND ON CITY LOANS

Press, Volume LXXVIII, Issue 23755, 29 September 1942, Page 5

SINKING FUND ON CITY LOANS

COMMISSIONERS’ REPORT

An increase in the rate of earnings from the investment of moneys in the City Council’s sinking fund from 4.039 per cent, at March 31, 1941, to 4.167 per cent, at March 31, 1942, was reported to the council last evening by the commissioners of the' fund, Messrs W. Hayward, H. S. Feast, and G. Manning. The commissioners cohjcluded their report with a warning that the present abnormal conditions should be set against the appearance of prosperity which marked the report. The report stated that funds under the control of the commissioners at March 31 amounted to £197,595, compared with £272,761 on the same date in 1941. Loans repaid amounted to £124,035, instalments received from the City Council were £38,940, gnd interest on the funds was £48,869, making a reduction in the funds of £75,166. Receipts for last year gave a return of 3.762 per cent, on available funds, a decrease of .231 per- cent, compared with the previous year. Expenses amounted to 2.453 per cent, of the interest revenue, against .945 per cent, in the previous year, the increase being due to charges in connexion with the recovery of mortgage assets. The commissioners said they anticipated a shrinkage in the interest earnings during the next five years, during which period there would be considerable sums on hand for shortdated investments at a low rate of interest. The commissioners said they had on various occasions in past reports expressed confidence in the soundness of the commissioners’ investments and notably so as late as the reports of 1937 and 1938, with the qualification in those years that conditions remained reasonably stable. They were not now living under stable or normal conditions. The whole world was at war. It was impossible for the commissioners to give the City Council such an assurance at the present time. The state of war must seriously affect all positions of whatever nature, the report added. Great numbers of the population had gone to the war or were out of their ordinary occupations. The absence of the men had already seriously affected the carrying on of farms and appeared likely to do so more in the future. Huge sums had been borrowed, and war expenses would probably increase. It would seem that such huge expenditure would entail increased taxation. Cr. M. E. Lyons said the report was a good one.. A decrease in interest revenue was only to be expected unaer present conditions, but the commig- • sioners’ warning v:as a proper one.