SINKING FUNDS

Poverty Bay Herald, Volume LIX, Issue 17955, 6 December 1932, Page 2

SINKING FUNDS

(To the Editor of the Herald.)

Sir, —Tfie letter of the Public Trustee in your issue of Saturday makes a brief reply desirable on the. part of the Power Board. Air. McDonald states that the purpose of the measure was to prevent local bodies withdrawing their funds in cash and entrusting them to new commissioners for re-investment in securities free from the restrictions imposed by the remit relief legislation, and lie argues that as the Public Trustee is largely debarred by that legislation from realising his securities, it would he unjust to require repayment from him now. This, however, is not the ground of the board’s complaint. Oar objection is directed against the main provision of the Act, which compels us to pay to the Public Trustee, spread over the next 20' odd .years, cash payments to redeem approximately £250,000'. The aggregate of' tho payments so demanded from the various local bodies must be a very large sum indeed. Wo see no justification for such, a drastic interference with the rights of local bodies, and Mr. McDonald makes no attempt to give any. The loss to this board, and presumably to other public bodies, will be considerable, and it appears to us unsound that public bodies should be compelled to face such losses at the behest of one State department.

M.r. McDonald states that “all that is being done is to require the local bodies to hear the share of the general sacrifice,” but I would point out that while tho Public Trustee receives a minimum of 5 per cent., local bodies are to receive a specially reduced rate of 4 per cent, only, a margin much too wide to suggest equality of sacrifice. It must not bo overlooked that one astounding effect of the bill is to statutorily' deprive the board of its right to test the validity of an agreement between the board and the Public Trustee, and such an arbitrary step cannot be justified 'by' the plea that to alloiv the hoard to proceed would place it in a* better position than other local bodies. If this hoard, by its foresight, is able to safeguard the interests of the district, then it should be entitled to do so, and no possible justification exists for the suppression of its rights by special legislation.

The position briefly is that the Public Trustee, as Sinking Fund Commissioner for the board, should be acting in the interests of the board and of the lenders, instead of which lie has promoted legislation which is mainly in his own department’s interests —Tours, etc., FRED. R, BALL, Chairman Poverty Bay Electric Power Board.