The Oamaru Mail FRIDAY, OCTOBER 1, 1880.

Oamaru Mail, Volume IV, Issue 1319, 1 October 1880, Page 2

The Oamaru Mail FRIDAY, OCTOBER 1, 1880.

His Wohship the Mayor has failed in accomplishing the object of the mission for which he was sent to Wellington, which was to arrange for the LIO,OOO Waterworks Loan out of the Trust Funds. When he announced the bad news to the Council last night, the feeling of disappointment was keen, and we think that the ratepayers will share in it. When Mr. Gibbs left Oamaru for Wellington there was not the least reason to fear that his negotiations would prove abortive. Tlse whole matter had, to all appearance, already been arranged with the Colonial Treasurer, the only question to be settled being whether or not the Trust Funds could be administered under the system which has hitherto prevailed. The Colonial Treasurer said that this doubt arose ill his mind in consequence of the passing by PfH']iaiuent of the following resolution, at the instigation of Mr. Stevens, Chairman of the Public Accounts Committee " That the present position of tjje investments of the Public Trust Funds should be taken into consideration by the Public Accounts Committee, with a view to see whether the treatment of thoso funds hitherto adopted is the best practicable." As the result of this resolution, the following report was presented to the House of Hepresentatives on the 2Stli July last: —" That in the opinion of the Committee, no loan should be made out of the Trust Funds upon any other than securities of NewZealand or other Governments, or upon bank deposit receipts. That, as soon as possible, one-third at least of the amount to the credit pf the Post-office Savings Bank Account should be invested in Government bonds, the interest on which is payable in London, to be used in case of any possible fiuaucial emergency in the Colony."' But this report was never considered by Parliament, and even the Colonial Treasurer expressed a doubt as to the amenability of the Trustees to the decisions contained therein. The Colonial .Treasurer knew full well that the report was only a recommendation to Parliament, and that, without the sanction of that tribunal, it was a deadletter. The principles involved are too important to be entrusted to the ipse dixit of a committee, however constituted ; but when it is considered that committees are usually packed by the Government of the day, and that the Government, by virtue of a subservient majority, can prevail upon Parliament to relegate matters of grave importance to such committees, it will be acknowledged that tp accept their recommendations unless they received the imprimatur of Parliament, would be to run a serious risk of Bureaucratic government. This is one view of the matter. We contend that, as a matter of principle, no recommendations emanating from a Parliamentary Committee should be adopted until Parliament has ratified them. On the other hand we are convinced that had the decision of the Public Accounts Committee recommending the adoption of a different method of dealing with Trust Funds been discussed by Parliament, it would have given rise to a protracted debate which would have ended in the modification of its proposals, or their absolute rejection. Trust Funds are not the property of the public. The Government has, by its institution of the Post Office Savings Bank, accepted the position of a Banking Company • and in its establishment of a Life | Assurance Department, in which insurers I share in the profits, it has accepted the position of a Life Assurance Society. It is therefore obligatory upon it to ses ! that the funds entrusted to these two institutions are administered as they would be by Bwds of Directors chosen by shareholders. The flqntrol pf these funds should not come within the Sjjopp of Government influences. The action of the Colonial Treasurer is clear evidence I of this. The temptation to appropriate more with a view to Colonial or political advantage than for the benefit of depositors ami insurers is too strong. The Colonial Treasurer knows full well that he ha 3 no right to lay hands upon these funds for colonial pm-poses unless he is prepared, on behalf of the Colony, to pay the highest rate of interest procurable for them in the Colony on good securities. The rates of interest liitherto paid by the Government for tjiese Trust Funds is 5 and G per cent ■ the rates paid by local public bodies is 6 and 7 per cent., there being only one or cv/oinstances in whichloanswere granted from these funds at 5 per cent., and these occurred during ft period of financial ease. To appropriate thpse moneys for colonial purposes at such rates of interest as the Colony pays means to rob those for whom the departments hold these moneys in trust of the advantage which would arise from the additional 2 per cent.; and we wish distinctly to impress this fact upon depositors in the Post Office Savings Bank and insurers in the Government Jjife Assurance Department. If they suffer this injustice in addition to an all-ronnd reduction of ten percent., the withdrawal of subsides, and grinding taxation, they are made of saintly material. There is yet another phase of this subject. Does it not appear sublimely mean on the part of the Colonial Treasurer to hypothecate these funds for colonial pur-, poses with one hftnd whilst with the other he abolishes the subsidies in violation of a pledge of a Qq? vernment of which he was Treasurer and subsequently Premier? It ia true that, in lieu of that which he has abstracted, he has, in the profundity of his financial wjs{]om, accorded to local bodies almost unlimited borrowing powers, provided they get tho amotion of Parliament. But where are they to the money 1 To them tho bunko have closed their doors to almost everything but deposits they cannot float srnail loans in the Englisji market, ; and the Government has grabbed tho remaining straw in deciding to appropriate the Trust Funds to its own purposes, or lend thejn on bank deposit receipts at 5 per cent, to banking institutiomr. ft will doubtless be urged , that, as tho Colony i# responsibly for these truwfc moneys, the Governrpenfc have a right to exercise supervision over tliern, and dispow p/.,thein In. any 1 manner they may deem best, (But i ttiey arc not only responsible for the j amount of Savings Bank deposits and j for the payment of amounts of life j

assurance policies, but for the administration of deposits and premiums in such a manner as shall secure the greatest possible advantage to depositors and those insured-. 'Major Atkinson may say that he is doing this to the fullest extent, consistent with safety—that the only safe investments offering are the securities of this and other Colonies and the banks, and that it is better to get 4 or 5 per cent, and to have undeniable security, than to get 6 and 7 and doubtful security. If the hypotheses were not so flimsy, Major Atkinson -would not have been guilty of atransparentsubterfuge. Eutitis well known that security such as that which the Oamaru Municipal Council offered —a special rate sacred to the purposes of meeting interest and sinking fund on the amount they wished to borrow—was never reckoned doubtful till now - and those who waited upon the Colonial Treasurer and asked him to favor the preparation q£ the loan from the Trust Funds can testify that he, on. several occasions, expressed him-: self ' perfectly satisfied with the nature and extent of the security offered. What does this characteristic change of front portend I—That the Colonial' Treasurer, in getting the control of these moneys is actuated by an insatiable tjesire tp increase his power; that he will tamper with them in a manner disgraceful to himself and the Colony.