Q.D. AND H.P. SCHEME.

Evening Star, Issue 19698, 27 October 1927, Page 10

Q.D. AND H.P. SCHEME.

TO THE EDITOE. Sir, —I have read with much interest the pages in the pamphlet supplied by your reader “ Curious,” which are designed to.'dispel any doubts about the period of Availing for loans. Such optimism is indeed cheering, but let us sec •what it loads to. We ivill not go as far as the writer of tho pamphlet and try to reduce the period of waiting, but bo content with granting loans to those who have been waiting tAvo years. It is only a question of mathematics to find out how many new depositors arc required in 1927 to provide loans _ for all Avho joined in 1925, after taking into consideration the repayments. This can be carried on year by year, keeping the total loans granted at sufficient to satisfy those Avho have been in two years. Unfortunately space docs not permit of a full explanation of all tho factors to be considered in the calculation, but I might mention that in several instances the repayments roach the maximum—viz., 16s in the £. Further, I should be pleased to have my figures overhauled by any other member of the Noav Zcalapd Society of Accountants whose name might be handed to tho editor. The result arrived at is that by 1933 the H.P. deposits must increase to £113,2.M,000, and the total loans granted must bo £192,332.000. Noav, when we remember that it has taken the deposits six years to reach £99,610 and a similar period for the loans to reach £1(53,907, 1 can only say that those people who can believe such a result possible should join right away. I was rather glad to sec Mr Moir suggest that the scheme makes uo fixed percentage of dividends. 1 had pone to some trouble to shoAV that a drop Avas possible and Avhat the result Avould be. He then tells us that the Q.D, depositors’ reserve fund Avill some day equal the deposits of those Avho have not received back their deposits by Avay of dividend; but Avhat 1 am concerned about is the £83,219 in H.P. belonging to people who have not had loans and for which there is no security. My anxiety on this behalf should be settled by the next paragraph, which states that people avlio have not had loans can withdraAv 95 per cent, of their deposit, but they cam only dnnv out the, money which other new depositors put into the fund to provide loans, and the only difference is that the money is OAving to different persons. Some people ansAvcr all criticism ol the scheme by saying that it_ Avould have been stopped ere this had it been “crooked.” But it must be remembered that many things arc Avithin tho law and still not altogether what they arc supposed to be. In this ease no misrepresentation is made. Depositors know exactly where their money conics from, and are not supposed lo join Avith their eyes shut; but the avliolo success depends on the progress of the company, and 1 think my figures aboA-e should prove that it is impossible , for it to make sufficient progress to keep the ball rolling. Your correspondent “ B ” bus certainly raised a good point in suggesting that 50 per cent, of all moneys paid in go to the promoters. This is scarcely correct, however, but Avhat cannot bo disputed is that, however small the deposit started Avith, in Avorking up to £5,000 each depositor provides £250 lor Avorking expenses. Wnndcrhil! —l am, etc., Apcouxtant.