325 



conductor, as applied to the earth in relation to battery currents, is a misnomer. 

 The popular theoiy is, that if the two poles of a battery be put to earth, at no 

 matter what distance apart — be it but one foot or one thousand miles — that 

 the current flows over the wire from the copper pole of the batter}^ to the 

 earth back through the earth, coming up at the zinc pole through the earth, thus 

 completing the circuit. This is not, however, what actually takes place, as the 

 current which leaves the line at the earth, on the copper side of the battery, 

 is taken into the common stock of electricity (of which the eai'th is a vast 

 reservoir) at that point, and that the current taken up at the earth plate, oil 

 the zinc side of the battery, is in like manner derived. 



Art. LXVI. — Notes on a Paper ^'^ On Sinking Funds" read hy Captain Hutton 

 before the AucMand Institute, September 7, 1868. (Trans. JS". Z. Inst., 

 Vol. ii., p. 236.) By J. S. Webbe. 



(abstract.) 

 \B,ead before the Otago Institute.] 



The object of Captain Hutton's paper is to disco vei', by mathematical investi- 

 gation, whether it is better to invest a. sulking fund in the loan which it is 

 intended to pay off, or in other securities. A man of business would not take 

 much time to answer so simple a question. It is quite unnecessary to go to 

 the trouble of calculation to discover— what Captain Hutton has done at the 

 end of his paper — that it is profitable to borrow at a low rate of interest and 

 lend at a high one, and that the longer the time this is done the greater will 

 be the profit ; for that is precisely what he means when he says that, " the 

 smaller the sinking fund and the higher the rate of interest, the greater will 

 be the saving effected." 



On the main question raised by Captain Hutton, it may suffice to remark 

 that the great advantage of using a sinking fund to buy in an annual instal- 

 ment of the loan to which it belongs, lies in the certainty of securing its 

 fructification at the same rate of interest as the State is paying for that loan. 

 It is, therefore, matter for congratulation that the safer plan has been adopted 

 in the case of the " Consolidated Loan Act, 1867," 



[Errata in Captain Hutton's paper, Vol. ii. of the '' Transactions." 

 Page 237, line 1, for "brought" read "bought." 

 „ 237, „ 26, for " log p v " read "— log p v." 

 „ 238, „ 14, for " T 1 " read " T — 1.".— Ed.] 



