TOPICS OF THE DAY

Evening Post, Volume CVII, Issue 21, 25 January 1929, Page 8

TOPICS OF THE DAY

Loan renewals by the Wellington City Council this year will have an effect upon the iinances of the future. The loans falling duo amount to £572,----500, and they are to be met by renewal loans aggregating £388,300. The difference is accounted for by sinking funds available for redemption in part of the loans. When loan issues were under consideration two years ago it was suggested by the Mayor that the maturing of these old issues would free the City of a substantial charge upon its revenues, leaving it with funds which would be available for other purposes —if these funds were not mortgaged ahead by the raising of nyw loans. There has been some mortgaging ahead, some of it at least unavoidable. This .wDI reduco tho amount of relief. That relief will bo further lessoned by two factors: the interest payable on the old and new loans, and the requirements as to sinking funds. On the loans falling due the interest rates are as follow:-r-£155,000 at 6 per cent., £160,500 at 4* per cent, and £257,000 at 4 per cent. The total interest charge is about £.26,800. We may safely assume that renewal of the G per cent, amounts will be obtained.at a saving, but it is equally clear that more will have to be paid for the money hitherto held at 4 and 4J per cent. Probably a saving of £6500 annually in interest will be possible, mainly due to tho operation of the sinking funds.

Against this saving of interest charges there will bo a higher charge for sinking funds. As wo understand the statute and tho rulings of tho Local Government Loans Board, loan moneys which have not carried a sinking fund hitherto will now require that provision on renewal^ and the sinking fund i>uyinents for other loans will not be reduced, though the amount of the loan is less. We cannot quarrel with this provision so long as it is based upon a reasonable estimate of the life of the works to which the loan capital was applied. Obviously if the sinking fund rate is fixed to extinguish tho loan in, say, twenty years, the annual pay. inents cannot be reduced (even though partial redemption takes place earlier) if redemption is to be completed in the period. But the effect must bo that the relief from the partial redemption of loans will not be so great as was anticipated. There ia greater necessity, therefore, for caution in incurring new loan liabilities. Though the total indebtedness of the City will be reduced as a net result of the redemption and renewal transactions, the annual charges will not be much less than formerly—certainly not so much less as to warrant a revival of borrowing except for projects of indisputable value.

Empire tours by British public schoolboys are a recent experiment. Parties have already visited Canada and South Africa, and next month a party will arrive iv New; Zealand. Tho scheme has the approval of Mr. Amery, Secretary of State for the Dominions, and the support of the leading British public schools. The boys, who travel with experienced masters, are all between 17 and 19 years of age. The tour is thus timed to fit in between the close of their public school life and the beginning of the university career. There is much to be said for this endeavour to a awaken an Empire interest in the minds of youths who may later become Empire leaders in politics, science, and commerce. It may be said that they are too young; but the Empire, especially in its outer parts, desires the outlook of youth. Youthful impressions may later require correction, but it is hotter that there should bo youthful impressions rather than none at all. Too often we find that Empire travel by the men to whom it would bo most beneficial is delayed because they are too busy until it is too late. The older man sees difficulties and decides that they are insuperable. Youth welcomes obstacles and is not daunted by them. \ * * *

In tlie orchard section or! tlio new issue (1929) of the N.Z. Official Year Book will he found figures showing that commercial orchards wore credited with occupying 27,150 acres in 1918-19 and 19,864 acres in 1927-28. At first glanco that looks like a decade of retrogression, but, as the Official Year Book

ahows, it is nothing of the .kind, since tho "bearing" section of commercial orchards has increased in the period from 14,182 acres to 18,283 acres, and the "non-bearing" section has decreased from 12,96S acres to 1581 acres. That.is to say, the young orchards of a docade ago, or those that proved worth while, have entered tho ranks of the "bearing," making good the wastage in older orchards caused by obsolescence in its varying forms. The "nonbearing" figure for 1927-28 suggests that there is not. the rush to found new orchards that there was ten years ago —which is just as well, until such time as oversea marketing finds a surer and unassisted basis. The fall in aggregate acreage over the decade tells a story of survival of the fittest. The working acres are much fewer, the output is vastly greater. Secondary industries envisage a similar tendency. They seek it by machinery and mass production, but have to regard the manual labour factor. Where markets are limited and competition is keen, the price of success is the highest efficiency.