The Gisborne Times PUBLISHED EVERY MORNING. FRIDAY, JUNE 28, 1907. FRENZIED FINANCE.

Gisborne Times, Volume XXV, Issue 2118, 28 June 1907, Page 2

The Gisborne Times PUBLISHED EVERY MORNING. FRIDAY, JUNE 28, 1907. FRENZIED FINANCE.

The questions involved in the suggested scheme for an outer harbor for this port fall under two main heads: (1) tho engineering and (2) the financial. It is a mere truism to say that it behoves tho community to beware that no mistakes are mado under either head. For the engineering questions we must, of course, trust the wisdom of those who. have had special training in the subject, but the financial side falls within the sphere of work of those who represent us on the Harbor Board. The Board’s solicitors have advised them that the Bill which it is proposed to bring before Parliament must be accompanied by statements of (1) tho financial position of the Board, (2) the estimated cost of construction, and (3) the estimated increased revenue to be derived from the proposed works. The solicitors suggested that the Board’s last balance-sheet would be sufficient for (1), that Mr. Marchant’s estimate of £350,000 would suffice for (2), and that a statement appended, drawn up by a committee of the Board, would satisfy requirement No. 3. This statement estimated the increased revenue at a total of £41,223. Severalmembers of the Board, however, were not satisfied, and at a meeting of the Board, in committee, it was amended to read as follows: —Estimated increased revenue to be derived from proposed work : £. s. Annual saving in river ex- ' pendituro 5000 Revenue from increased dues 5000 Saving on lightering ... 8473 Saving on direct freights 8562 10 Increase in Tauwhareparap rents 5000 Extra increase of revenue 8000 Total ... ... ... £40,035 10

Even tliis amended statement did not meet with unanimous approval, and the discussion which followed failed to throw ally certain light upon the amount would he availahle for working expenses of the new harbor. It may be presumed that the Board’s solicitors did not submit Ibis statement to an accountant before recommending it for adoption by the Board, and the Board does not appear to have consulted an accountant at its sitting as a committee. But we may be sure that ae-

countants will liavo something to say when the matter reaches the House of Representatives. No harm will be done, then, in analysing the figures on our own account with a view to testing their suitability for th 0 demands made by the letter from the solicitors. At tile outset it must be premised that the increase of revenue to be estimated is that of the Board and not that of the merchants of the place, and that the increase must be reasonably placed to the credit 01 the

proposed new works. When these tests are applied to the several items of tlie statement very serious havoc is worked. The saving on lighterage should have set against it 4s a ton railway haulage which will reduce the amount to £1694 15s, but even this does not come to the credit of the Board’s account, and must therefore be disallowed. The latter objection is fatal also to tho saving on direct freights, which, too, appears to have been reckoned on a very lavish scalo. As tho increase in Tan-

Ill* loli HO UflV lUVI UUOV 111 XII Uwhareparae rents is in no way connected, with the proposed now works, it must be removed from tin's account, while extra increase of revenue is apparently based upon the expansion of the town and is again not a factor of tlio proposed new work. That leaves ns with only two items. Increased dues on' steamers may reasonably be expected to produce £ISOOO. But us the public will have ultimately to pay the sum m increased freights, the amount might as reasonablv lovied by means of wharfage. However it seems unlike-

ly that the Board would attempt the iOVY in any case without the no works, aud tlio item may stand. But tlio first itom is somewhat difforont. It is conceded that it > necessary to spend about, £IOOO an nually on tho rivor, and in oidoi to show an apparent saying. head, constructive works such as wharves and sheds have boon taken into account. When those accounts have boon properly adjusted it is questionable whether-the saving in tin rivor duo to tlio existence of an outer harbor will bo more than £IOOO, say £2OOO at the outsulo, making a grand total of estimated increased

revenue to bo derived from proposed works £7OOO. And this is gross re-venue;-the net increase, with nbich we aro concerned, will be this £7OOO less the increased annual expenditure duo to tho proposed works. >Vo nave not at present data available to estimate the salaries of the additional staff which will bo required, and tho upkeep of th 0 fabrio itsolf, but we may safely hazard the statement that vory littlo will bo loft from tho £7OOO to carry forward to interest and

sinking fund .account;, _ Tho abovo romarks by no means oxhaust tho criticism winch might be mado on tho figures m the statomont. But our immediate concern is tho connection botwoon such finance and the Bill to pave the way to an outor harbor. It is impossible to doubt the sincerity of the Board in its promotion of the Bill; but it could hardly have devised ainoroeffoctive means of ensuring its rejection, than the compilation of this fallacious and illusory estimate of the increased revenue to be derived from the scheme. Beforo it is too late cannot tho Board take a saner view

of tho statements to accompany the jjjjl. Let tho estimated increase of revenue duo to the works contain only tho legitimate items. Let tho prospective increase from Tanwliareparao and natural growth of the port be included in tho financial position of tho Board. And let savings to shippers, where such can be shown, bo relegated to a separate document setting forth tlio contingent advantages to the district. And finally let all tho estimates bo checked by a certified accountant.