THE MAYOR'S LOAN PROPOSALS.

Timaru Herald, Volume LXXV, Issue 11578, 14 October 1901, Page 3

THE MAYOR'S LOAN PROPOSALS.

To tie Editor of the "Timaru Herald."

Sir, —A letter appeared in your issue of the 9th instant, signed "Ratepayer," in which he gives one to understand that an average ratepayer — " the man who owns a cottage and section"—will have to pay £315 in 39 years if the Mayor's proposal to borrow that £50,000 is carried. This means over £8 a year. Now, I am the owner of a " cottage and section," and I must confess that " Ratepayer's " letter gave " me and the missus" such a fright that we at once decided to sell out. We are no scholars ourselves, bub one of our boys, who has passed the sixth standard, and happened to overhear our conversation, sharpened his slate pencil, and after a bit, told us not to worry, as " Ratepayer's " figures were all " rot," and he couldn't have passed the sixth standard, or would know a little about compound interest. The boy told us that if 1 per cent, per annum sinking fund is invested at 4£ per cent, per annum it should only require £19,500 to be paid into sinkimr fund to pay the whole £50.000 in 399 years. The boy couldn't say how "Ratepayer" arrived at his figures, Taut guessed he must have dreamt them, or else added the compound interest instead of deducting it, which would make a " double compounddifference," whatever that may be. Now, I don't agree with all the Mayor's proposals, but intended to vote for some of them. I was dead against that gasworks business. The £25,000 was rather a staggerer. But the bov says that if the gasworks gave a profft of £SOO a year, that would be sufficient to provide sinking fund for the whole £50,000 (not only the £25,000 for gasworks) and pay it off in about 40 years. If the boy is right, I think it would be rather a good thing for the borough to take over the "asworks. if they

can get them. Now, the Doy's figures may be wrong, and I would like " Ratepayer " to kindly correct them if they are. I am, etc.,

ANXIOUS.