The Guardian And Evening Star, with which is incorporated the West. Coast Times WEDNESDAY, AUGUST 17, 1932. A MUNICIPAL WARNING.

Hokitika Guardian, 17 August 1932, Page 4

The Guardian And Evening Star, with which is incorporated the West. Coast Times WEDNESDAY, AUGUST 17, 1932. A MUNICIPAL WARNING.

•That the affairs of the Thames Borough Council are in a hopeless financial state, is evidenced by recent remarks by Mr Justice Ostler, who was considering! applications by creditors of the municipal council for • the apppintmbent of the receiver. In .respect of a streets improvement loan of £70,350 and a sanitary works loan, of £OB,OOO, the council had defaulted in payment of interest since October ? 1031. Four petitions were filing asking for the appointment of a receiver under a. 48 of the Boca] Bodies Loans Act, 1926. The court refused one application and adjourned tinothers for one month to enable the G'lwernor-Olainerafi-ih-Council, if he sees fit, to appoint a commissioner under the Thames Borough Commissioner Act, of tlie case in the course of written judgment, His Honour said that, during tli© past 10 years, the Thames Borough Council had indulged in an “orgy of borrowing” for the purpose of constructing public works wilbi" the borough. It wag unnecessary to give the detailed history of the loams which had bee” raised, but it might be stated tl’f't jn 1921 bho unimproved value of r ■ teal 1 land in the borough was over £283,(100, and the total debt of the borough was about £40,000, or about £l4 to every £IOO of unimproved

value. To-day the rateable value of unimproved land in the borough had sunk to about £107,C00, but the total amount of loans raised by the borough, and secured on rates payable in respect of. unimproved value, was no less a sum than £250,0C0. In addition, the Thames .Harbour Board had raised £OO,OO0 } secured by Borough rates, so that there was, a total! debt of £2OO for every £IOO worth

of unimproved value. “It will thus be seen,” said His Honour, “that, while the loans have beep steadily mounting up, the value of security offered for them has been just as steadily diminishing, untif the borough vis at the present time* hopelessly insolvent and unable to meet its liabilities, arid has - made default in the payment of interest due under its Joans.” His Honour pointed out that since 1924 there had been no issues of loans taken up by the public except a small loan of £575 by the Australian Mutual Provident Society, and one of £12,000 by A. and G. Price, Limited, both in 1925. With these exceptions, all the money borrowed by the borough sinbe 1924 had been lent by Government departements, chiefly by the Public Trustee, who had invested no less thiui £130,000 out of ' the Common Fund In Thames borcojgh securities^'lt seemed Inevitable that the Common : Fund would suffer a heavy loss In this Investment. The opinion held by His . Honour wais that, if a receiver were appointed .and subsequently the Governor-Geiieral-i’i-Coun-cil appointed a commissioner,, the latter appointment would immediately render the receiver powerless. He could take no ; . step 1 to enforce the payment of interest. It would be futile to appoint a receiver if his powers were liable to be destroyed 1 immediately in that way. No doubt a receiver will ultimately, be and Ins task will be to collect 'as much as. he can from the rate-ridden ratepayers, while in the meantime civil amenities must suffer severely.