SIMPLER SYSTEM

Feilding Star, Volume 10, Issue 4043, 28 September 1933, Page 4

SIMPLER SYSTEM

Yet another anxiety has been put into a system and it is the latest idea sprung upon an unsuspecting public. This time, it is an alternative system and it was promulgated this week by an officer of the, Treasu/V, Mr F. E. Mitchell before, the Power Boards Conference. “In the past,” lie said, “it has been usual for provision to lie made for repayment of loans by means of a sinking' fund,, although there is now a growing tendency on the part of both borrower and lender to arrange repayment on tlie instalment or annuity __systems.” In many cases it would be possible, for local authorities in arranging conversion schemes to hang® the method of repayment from a sinking fund basis to a basis of what. might be called annual redemption of debentures. “Under such a system existing sinking funds can be consolidated and held for the benefit of the conversion loan. The amount which is normally payable annually to the, sinking funds can, however, be, utilised ceali yea.r for the redemption ft debentures, and can be, augmented in most cases at, any rate by an amount equivalent to the earnings of the, existing sinking funds, and the, corpus of the funds can be gradually drawn upon for redemption purposes.” Which goes to, prove yet again that systems are, only adding to the worries and anxieties of local bodies as well as individuals.