MUNICIPAL SINKING FUNDS.

Dominion, Volume 2, Issue 440, 24 February 1909, Page 7

MUNICIPAL SINKING FUNDS.

A PROTEST AGAINST THE NEW ACT.

(BY TELEGRAM —PRESS ASSOCIATION.) •' Dunedin/February 23. This morning-a deputation, , consisting of the Finance Committee of the City Counpil, waited on -the Hon. J. A. Miflar; ■ to. objqet to a provision passed by Parliament last sea-' sion in tlie Local . Bodies': Loans Amendment. Act, whereby loOal bodies/shall in futuie appoint none but.the Public Trustee to--ad-minister sinking fimds. The Mayor of .Dun*, edin (Mr. M'Donald) said' that the deput-a-tion approached the Minister in ;his capacity.. of private member./ The.Dunedin. Gity. Cor-;, poration recently/floated'..ill ..Londo(i,-.a t .lpari,. at £206,000 at 98 bearing, interest at A per cent;. This had, been - done. - .without t. r an) - .Government guarantee, and ; ; the// council; thought it rather hard that a sinking.fund on this should he. paid to the Public Trustee, whose investment of it would ;realise;a comparatively low rate, of /interest. _ In the past the Dunedin Corporation's sinking 'fund commissioner had done excellent work,; and . made practically, no loss. on Jrivestments; _ ;; Mr. ' Gilkisori ; said -that,; on'/fiVe' : corporation loans, totalling £317,000,' the. commissioners. 'by judicious investment, had returned the council £200,955 in the;last 30 years. They had thus paid off 68 per cent. -of borrowed moiioy. Re.assumed 'that the Public Trustee_ would charge ;the 'council'the .customary o : mr cent, per, anhum'on the council's receipts. There was a quarter of a million , invested on mortgage in Otago,; and, if;this :money...were; taken from /Dunedin and invested in. Govern-, ment securities, there would be a great'short-' age of money, in the/city, available for lending.. All that the council asked for was to bo freed: from the imposition of. a" burdensome section of the Act/as it really: meant;that:. the four large centres would nave to "carry weaker/ municipalities- on their-;backs.-Tho /Minister relied I that last ; year. the Government had brought- down this particular Bill with the idea that,, by/ getting a fairly' large loan oh bahalfi. of local bodies, consolidated, the loan; being , guaranteed by tho Government, better terms could be obtained from lenders. If the" House desired it, the whole; Aot,could;.be repealed. From one point; of View lie would bo glad to see this, done, as under the Act the; Government contributed i per cent, per/annum-, to/ tho sinking fund. .The Government, would not guarantee :' loans/ /unless .- sinking funds thereon were paid in 'to tho Public Tnisteie. Although in Dunedin and other-places , sihk r ing funds had been well administered, by commissioners, it must'not.be forgotten that, in some large cities, there had. bceri,an ; in-. flat-ion of values -ofv.mortgage securities/on which, money was lent; owing to prosperous times and crowding .caused .by a rapidly-in-creasing population. The quarter of a million' would not bo withdraw from circulation ail at once' by the change in administration* of the fund. In/his capacity, of : member'for the district,' he would place the" corporation's views, before the Cabinet .w. strongly:'as ho icoald. In whatever/ decision .the .Cabinet pamo to in the matter thereafter he: would (bf courso bo bound to .uphold'them. If the iQity Council/petitioned Parliament, the matiter would be gono into: by which' would bo influenced in any subsequent laction by the report of the Public Accounts Committee. ;..., ■ ■ • •...■ '.