THE BONUS AND RAILWAYS.

Evening Star, Issue 18022, 17 July 1922, Page 6

THE BONUS AND RAILWAYS.

TO THE EDITOR. Sir, —I notice under the above heading Mr J. E. MacMamis, in his letter to tho 1 Star,’ makes a very misleading statement in regard to the war loans—viz., that owing to depreciated currency tho bondholders are getting a very heavy rate of interest, and when tho loans fall due will ho paid twice tho amount originally lent. In tho first place, a very large number of tho bondholders are small investors, and put, in many cases, tho savings of past years into this class of investment as a provision against old age. Tho money so saved was put by when a pound was a pound; therefore it is obvious that they did not got a £1 bond for ,10s. In regard to rate of interest—viz., per cent, to 5i per cent., I should like to point out that before tho war 5 per cent, was tho current rate of interest for first-class mortgages;therefore, on Mr MacManus’s own showing, if £1 is now worth say 10s, tho present ratio of interest is only per cent., free of tax, and 2£ per cent, and 2fJ per cent, with a tax of Is 3d in the £. Therefore tho rate of interest is nothing like equivalent to pre-war days. Tho proof of tho poorness of tho investment is tho fact that people are only too willing to soil them for considerably less than they actually paid. No, Mr’MaoManus, it was not tho rate of interest that attracted investors, it was cither compulsion or,in many cases, a sense of duty and patriotism.—l am, etc., Wage Earner. July 17.