CO129-336 - Governor Nathan & Public Offices - 1906 [11-12] — Page 121

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is that it is relieved from the necessity

(inherent in the old system of these Funds)

of contributing 6 per cent compound interest

on surpluses, should such exist, which had the

effect of continuously increasing the surpluses

and of throwing on the Government a larger

burden than was reasonable or necessary. On

the other hand if there were at any time a

deficit, the fund system would tend to in-

crease that deficit, since the Government

contribution would then be calculated on a

balance smaller than that needed to meet the

future liabilities of the fund, and the

Government contribution would therefore be

less than the amount required to maintain an

equilibrium between the assets and liabilities.

Thus the normal condition of the fund must be

one of more or less unstable equilibrium,

and this unsatisfactory condition would be

intensified