Vouchers For City Works

Dominion, Volume 28, Issue 210, 3 June 1935, Page 11

Vouchers For City Works

Sir, —“A Daniel Come to Judgment comments on my suggestion as follows: “Would any sensible person or bank lena £30,000 on a security which produced no ' return on the money and which security was not even in the possession or use of the lender, but in the sole use and possession of tho borrower?” Now "Daniel” has overlooked some very important facts I stressed. The bank suggested is the Reserve Bank, to all intents and purposes a State bank, not interested in making profits in the ordinary sense of the term, and whose surplus profits go to the 'Consolidated Fund to reduce taxation. The work suggested is a local body work or could be a national work for which a section of the community pay if local body work, or all the community pay if a national work. Hie possession of the completed w*ork is covered by a mortgage (free of interest) to the mortgagee (Reserve Bank) even if the council were to operate tho aerodrome. He makes the suggestion that Wellington city might steal or in some other way take it from the Government, and this is just stupid. He should have taken all these points into consideration before replying as -without doing so Ins comment is just “hot air.” In commenting on the figures of the Reserve Bank operations for eight months which I quoted, he states had •Equity’s’ policy been adopted no such profit would'have been earned, hut probably a very great loss would have been shown. I am glad he said “probably, bu u what a pity he used tho words ’ very big loss.” The figures did not seem to convey their meaning to him. I pointed out that the operations were for eight months, and it is stated that the Reserve Bank is paying 5 per cent, interest' for 12 months on shareholders capital not put in till August 1934. A gift of 5 per cent, for four months ■ on shareholders’ capital out of the first eight months’ operations. The bank has put aside £6OOO for the staff- superannuation fund, and the new staff have been working for only eight months,, so What does that mean? It means the bank has put aside £750 per month, or about £l9O per week and if the staff consisted of 20 People (perhaps less) it is equal to £9/10/per week per person in the Reserve Bank staff, and this out of the first eight months’ operations. Surely struggling taxpayers should have the surplus’ funds to reduce taxation. / < - My suggestion only requires per cent, interest (I did mention 5 per cent.) as the rating basis for paying off the loan or £lO5O per annum, as the bank and the Consolidated Fund do not want profits—seeing they are going out the wrong way —why not leave the rates collected with Wellington people for further important works? “Daniel” either will not or cannot recognise a new era of finance and is wedded and soldered to the idea of interest paying and refuses to acknowledge that the community credit on which the Reserve Bank works is the community s, from which the community should benefit. Regarding the other comment about why should others than Wellington require Government and Reserve Bank consideration, I presume the Government would net in consultation with the Reserve Bank and the local body considering nny such loan. I did not make any statement to the contrary. “Daniel is decidedly wrong about an attempt to get “something for nothing,” and I don t know how he can honestly advance the argument in view of tlie suggested rating to pay the principal back (if required) or to'make provision for paying it back, but ou the above showing it docsn t seem altogether necessary, and a little more national or local body debt would hurt nobody meantime, but would do a great deal of good. . , I do not consider “Daniel’s” comment of Ins personal opinion an answer. Something more is required to relegate the suggestion to the realms of impracticability, although he is certainly entitled to his own opinion. If he has any good criticism it is still welcome.—l am. etc., EQUITY. Wellington, May 30.