ANTECEDENT LIABILITIES

Hauraki Plains Gazette, Volume XXXIII, Issue 4411, 8 May 1922, Page 2

ANTECEDENT LIABILITIES

EFFECT OF NEW ACT. MONEY-LENDING INSTITUTIONS. IN FOR A HARVEST. Many of, the circular letters received by local bodies do not reflect very favourably on the degree of intelligence possessed by the senders-., A refreshing change from the usual mediocrity of such communications came before the Ohinemuri County Council bn Thursday, in the form of the following letter from the Pahiatua County Council, in which it wasshewn that the Governments by refusing loan moneys for the liquidation of the “antecendent 'liability" under the Local Bodies Finance Act, . was playing into the hands of private money-lending institutions.’ In view of the fact that the Local Bodies Finance Act came into force on the Ist inst., and all local bodies throughout the Dominion are required to make the necessary arrangements for funding either wholly or in part the . amount owing on overdraft at its banker’s or on deposit at March 31 last, my Council has resolved as follows: "That all local bodies throughout the Dominion be asked to approach, the Government, requesting it to ap-j portion a part of the loan being rais4| ed on the London market for payment of Local Bodies Antecedent Liabilities..” In enlarging upon the foregoing resolution, I am directed to point out to those councils who have decided to fund their liability by way of loan, that the State guaranteed lending institutions, namely, the Advances Office and the Public Trust Office, have declined to entertain loans for such purpose, and that being so, it means that local bodies will have to borrow from private institutions or individuals, and the consequence is that high rates, of; interest will be demanded. My Council considers that as the Government has brought about: the present position of requiring local authorities to fund antecedent liabilities, it should make provision in the minner indicated, to allow Councils and Boards to borrow from it the monies required, at a reasonable rate, of interest. Should the foregoing resolution meet with your approval, I Would be pleased if you would bring the matter under the notice of the Hon. the Minister cf Finahce.. and the Member of Parliament for your district. Or. S. H. Morgan supported, stating that the local bodies, were nob etter off if they had to go to the banks and pay bank rates of interest, which nt one time were as high as 7 per - cent. The chairman (Cr. A. R. Robinson) also supported ; the tion seemed to be. of the