A GREAT SAVING

Gisborne Times, Volume LXXI, Issue 11324, 30 September 1930, Page 6

A GREAT SAVING

Hli-PBOR BOA'N SINKING FUND.

Mil: <H.; A. BARTON’S SCHEME

TRIBUTES BY BOARD' MEM BEK S,

'SoTSe.:warm tributes to the work of,- the secretary and treasurer,' Mr. PL -A,' Barton, were paid at yesterday’if (meeting- Pf: the G - sborne liarbor Board and, as as a mark of recognition' Vof Jiis extra work in connection with the investment of x-lio sinking fund,, he was voted a bonus of-£SO . ....

: The linanc-e committee reported sis follows in this, regard:—

.‘‘The . committee. considered the suggestion .that was made to the board 'by Member A. H. Walks regarding- 'remuneration to Air, Barton for what he has accomplished m connection...with the smlcmg fund of tin* (Authorised) loan. . //“.The-committee had hot ore them information . showing that a limit eighty years b go Mr, Barton, on ids own'-..initiative and quite outside oi his duties, as secretary, to the hoard, interested.-himself in producing ways and,-.means to secure greater earnings -than had up to that time been obtained on 'sinking lund moneys with tljo 4 Public 1 Trustee as comuust inner; that arrangements v. ere accordingly made by the board to test It;s,,.proposal; that Air. Barton was appointed one -of ilie commissioners and tbfit. on behalf of the latter. Air Barton' had arranged very satisfactory -investments and had initiated and successfully carried out a novel Scheme -making regular investment maturing in ' the year 1954 available for sums of from £4OOO to £(5000 per year, until the year 1080 w.bh possible extension to later years—thus sustaining his contention that, m earlier years, the best possible investment or previous sinking . fund moneys had not been made; tiiat'the present fund is only in its mlancy but that, nevertheless, under tho arrangements lor which Mr. Barton r.olely can be credited, the comnnssiohers have been placed in a position: well on- tile way towards on taming tho anticipated total gain of mb' least £12.500 at maturity of tn» loan ■ ;

■■‘‘‘.Up to the present time neither the-hoard nor the commissioner* linvepaid any person anything at ail in- salary or. in fees of anv kind hi connection with custody of tiie funds or for finding or arranging past and future investments, or for collection of : interest, or for keeping the accounts during the last six rears. “The committee recommends the board'to pay Air. Barton a bonus of tit least £50.”

SCHEME IN GREATER DETAIL. Mr- Barton also placed before the board the following more detailed account, of the dealings with the sinking' funds: — , -4*Jn 1923 when the first instalment ofAthe .£l,ooo,ooo'loan was about to he-raised (although the sinking fund was a matter that did not come within.. the scope of my duties as secretary) I became concerned regarding the earnings of the sinking fund moneys of the previous loan, (raised in 1914), and I formed the opinion that the board should be able to obtain a considerably greater rate of .interest than was being received through the Public Trustee, who, up to that time, had had charge of each of the board’s sinking funds. There never had been obtained more than per cent, interest through the Public. Trustee. (To the present day that is the greatest rate lie can pay). This had been, the position over many years .even although sound investments returning up to 0 per c-ent. had been obtainable. ‘“L worked out figures that convinced that some change should be made; ns an average advance of only one quarter per cent, interest wouldimprove the fund by many thovjsands of pounds during the term of the loan, and I. realised that, whether the value of money during later years should go higher or lower, it ought to lie possible to invest at all times at at least one quarter per cent, higher/rate of interest than could be obtained through the Public Trustee. "I brought the matter under the notice of the then chairman of the board, Mr- G. Smith, and the solicitor, Air. Chrisp, and urged that the hoard he 'recommended to test my proposal by appointing local commissioners, who would have a free hand. The proposal was adopted by the hoard. AJossrs. A. If. Wallis, AV. G. Sherratt, G. Smith and myself were appointed commissioners, and the responsibility 'for the (sinking; fund of the £1,000.000 passed to us instead of the Public Trustee- “ The commissioners have been very successful in investing the funds. They now hold £17,650 in gilt edge securities returning 0 per cent., s'] per cent, and nothing less than o$ per cent, interest and. by the scheme they successfully arranged last year with the Bonk of New Zealand and the board, a definite gain, of £5134 above wliat would be possible through the Public Trustee has already been established. Under this: scheme the Bank of New .Zealand purchases the board’s remaining debentures, and holds them for sale to the commissioners. Therefore investment has been created several j years in advance ready for tho year- i iv" instalments and the earnings of • Ihe .funds, whenever sums come to fiie hands of the . commissioners. This scheme satisfactorily secures development of the fund for half of its life, .■lnil is arranged in a manner that makes it unnecessary during the next liiino to- 10 years to lose even. one day’s interest on any part of the funds by having to wait until suitable investment can be arranged. “In the hands of .the Public Trustee at ,5J per cent- interest, the fund would amount do £254,360 at maturity of the loan in 1954, whereas under the local commissioners’ arrangements, and assuming that only one quarter per cent, above the. Public Trustee's rate of interest will be obtainable on investments to be made liter the year 1939, the fund will amount to £266,728 at maturity--showing.a gain of £12,468, of which, i>f -previously slated, £5134 has already. been definitely established by :he scheme arranged with the Bank if New. Zealand.

“There is good reason to anticipate t gain of at least £12,468 hv the 'and being .handled by local j comnissioners' . This fund will 1 now acumulate at a very rapid rate. The ommissioners rd present have only 217,650 in their hands, but by Deombor, 1935, it will have accumulat«L to the sum of £51,920, and by 054 to the sum of £267,000.

i '‘UP .to the present time neither he board tiov the commissioners lave paid any person anything at all a. salary or in fees of any kind in •onnection with custody of the hrids : or for .’finding or arranging ast and future investments, or for olleotion’ of interest or for keepig the accounts. It should be noted hat the foregoing has nothing whatver to. do-with -the ■■sinking .fund- of he 1914 loan. The latter fund is still i the hands -of the Public-Trustee nd is quite a separate matter-” Figures were also placed before the oa’rd' r making comparisons- between re-interest payable by the Public rustee arid ■ that obtainable- .from ther ri venues. of'investment This-re-ini'- . also showed ' that,' r under Ir; * Barton’s \ scheme, all moneys lining into -the hands ;> of the nking fund commissioners, up >41939^4 totalling £76.236, would be ivested; without further trouble to jg boardr

The chairman. Mr. J. Tombieson, pointed out that the savings already effected hv Air. Barton’s scheme totalled £205. but that it would rap djy grow as the years went on Mr. (t-. Smith warmly praised the excellent results attained by Air. Barton, pointing out that he had put in a tremendous amount of extra work and that, by 1931). the prolit produced by the scheme would he very large. The payment of. £SO to Mr. Rarton was a mere Ilea b'to compare .1 with what -he would save the board. Dr. Collins pointed out that Mr. Barton’s scheme would save the board about £II2.OLD. He urged that the bonus .should he paid and that the hoard’s thanks hff extended to .Vlr. Barton for his excellent wo lc. Air. A. Wade opposed the bonus on the ground that rigid economy should be' exercised to-day, rather than further liabilities undertaken. In these times of retrenchment, lie believed that Air. Barton should be one of the (inst to be affected. After some further discussion, the recommendation for the granting ol £SO to Air. Barton was approved.