MUNICIPAL FINANCE.

Press, Volume LVII, Issue 17111, 5 April 1921, Page 6

MUNICIPAL FINANCE.

TEMPOEARY LOANS. The financial statement presented to the City Council last night showed that the general rate levied totalled £83,035 6s Id, of which £67,606 "l'2s 8d was collected, leaving £15,478 f3s 5d outstanding. The receipts since the last statement totalled £47,832 14s lid, while the accounts authorised for payment by the Finance Committee amounted to £78j393 9s. Included in the receipts were rates £28,631 3s Id, temporary loans- £IO,OOO. The temporary loans repaid totalled £47,426 los Bct. The District Fund account was £126,475 10s in debit, of which £54,986 17s od was for temporary loans. The Finance Committee reported to the Council that as a result of the moratorium affecting temporary loans placed with the Council, the Bank of New Zealand had notified that the Council must not draw on the bank for repayment of deposits. The committee was unable to say how long that state of affairs would last.

Cr. J. A. Flesher, chairman of tho Finance Committee, said there waa no cause for any alarm. Every temporary loan required to be repaid had been repaid by the Council, without any difficulty, but. it was only right tho committee should report what had officially come to it from its bankers. Cr. Herbert asked what effect the .moratorium had had on the receipt by "the Council of temporary loans. Cr. Flesher said that money was still being offered to tho Council for the moratorium only affected past loans, not loans made subsequent to the moratorium .- Cr. Sullivan said he doubted whether in the legislation passed last session it was ever contemplated that the banks were going to act as they had. The legislation was passed in order to try to preserve the financial stability of the country, and prevent anything in the nature of a run. The banks, however, had gone very much further, and had refused to make' advances to local bodies to enable the latter to repay temporary loans. The effect of that would be to' Btampede all money into the banks, and would create a ijood deal of difficulty for the local bodies who, in the past, had made use of temporary loans. The Mayor said the moratorium did not' aoply to new loans. "This 'Council,'' he added "is as sound a financial institution as any in the world. It is better than a bank; a bank can go bung, but not tho Council." Cr. Armstrong mentioned the tramway loan of £35,000. Cr. Flesher replied that had all been repaid. The Finance Committee also reported that an Order-in-Gouncil authorised the Council to increase the rate of interest to 5i per cent, on the. folio wing loans: North Richmond waterworks £4BOO, Linwood public works £7500 v Sydenham waterworks (new loan) £7430. Although the rate of interest was fixed at 5J per cent., no exception would be taken to the debentures being sold at such a rate as would yield 5$ per cent. to the'investor..