REPAYMENT OF LOANS.

New Zealand Herald, Volume LXIII, Issue 19404, 12 August 1926, Page 10

REPAYMENT OF LOANS.

PERIOD OF AMORTISATION. COST OF ADDITIONAL INTEREST. HEALTH DEPARTMENT'S VIEW. The economy of short-dated: loans for local body expenditure was mentioned by the. secretary •of the Department of Health, Mr. E. A. Killick, in an extempore statement at Monday's sitting of the Auckland Hospital Commission. - At the request of the commissioner, Mr. A. Gray, K.C.j Mr. Killick prepared a memorandum submitted at yesterday's- sitting, in which he has elaborated his references to the department's policy on loan matters. Mr. Killick illustrated his contention by presuming -a losn of £IOO,OOO at 6 per cent., with sinking fund at the rates required to discharge it in 10, 20 or years. The annual charge and the aggregate payments would be as follow: — ; Sinking-Fund.-Annual Total ■ Term p.c. charge. .payments. 10 Years .. 8 i 14,000 £140,000 20 Years .. 3 £9.000 £IBO,OOO 36j Years .. 1 .£7,000. £255,500 "From this it will be seen," Mr. Killick said, " that there is some considerable difference in the burden of a 10 and a , 20-year loan, the sinking fund being nearly .three times as high in .the former case and the annual burden about half as much again; whereas the grand total does not show anything like the disparity between a 20 and a 36-^-year loan. "In the case of a 35j-year loan, however, the annual burden is not so much lighter than that of a 20-year loan as to be an inducement to continue to pay 6 per. cent.< interest for a further 16£ years. There is no need to enter into the question whether posterity should not be asked to bear a portion,of expenditure on hospital capital works. The.posterity fallaicy has long since been exploded by high authorities on economics and finance, quite apart from l the possibility that may always occur of- the early obsolescence of hospital buildings owing to advances and changes in medical- and surgical knowledge. , Moreover," posterity was not asked to pay for; existing buildings,, which 1 were , paid for at the time' of. theit erection. ' Once, therefore, the. need, for capital works is recognised > an endeavour' should be ' made to pay for them m as short a period as possible. NEW FRESH-AIR ' SCHOOL. 11 O - GHRISTGHURCH INSTITUTION OPENED BY GOVERNOR-GENERAL. [by telegraph.—press association.] CHRISTCHURCH. Wednesday. In the presence of a-large gathering of representatives of local bodies and other, spectators the Governor-General opened the new school attached to the children's fresh-air home on Cashmere Hills this morning. Sir Charles Fergusson was accompanied by Lady Alice Fergusson. Dr. V. ! J. Blackmore, inedical" officer in charge of- the Cashmere.. Sanatoria, out-., lined the work , being, done ,in .-.treating; the children. He said, the children came in weak and sickly and" went ouC full' ! of the joy of life, and vigour which rightly Belonged to them. , . ... Sir Charles Fergusson. said he would, like to express his sympathy with the object of the .movement and the general efforts which had been made to give it shape. They were all grateful to "the Rugby Union, the Commercial Travellers' Association and all who had laboured to make this an accomplished - fact. Ho could appreciate the. motives which : lay behind them. They could-readily under T ■ stand that children should-be, given every Opportunity of becoming-strong. 1 As ro j ; garded the open-air school : movement. generally he Was entirely at one with'those who started it': He was glad to see that the Education Department had also expressed itself, strongly. in. favour of . these .schools. His Excellency then turned the key in the door and declared the school open.