LOCAL BODIES' LOANS.

Stratford Evening Post, Volume XXXIII, Issue 26, 28 May 1912, Page 4

LOCAL BODIES' LOANS.

LIMITATION MUST CONTINUE. The financial requirements of local bodies in country districts and the restrictions upon State advances which the Government iias lately introduced were discussed by a deputation, from tiie Local Government Bill Conference, which waited upon the Minister of Finance (the Hon. A. M. Myers). The members of the dejjutation were Mr A. E. J nil (presxleiiD of the Counties' Association), and the following chairmen of county councils:—Messrs Ji. •J. Slade (Hobson), J. Brown (Tarauaki), W. Hathaway (Stratford), and J. T. Quin (Eltham). Mr. dull said tho deputation desir-, ecl to place before the Minister the po-' sition of county councils with respect to their inability to complete their road requirements on account of not having sufficient facilities for borrow- \ ing money. They understood that tho department was agreeable to advance only to £SOOO in respect to any one local authority, and, while they recognised that that was the position at present, thoy would like to know whether they might hope for tho amount to be raised or whether it was the intention of the department to continue the limitation of" amounts which might be advanced to any local body under the State Advances Act. There were great numbers of local authorities in rural districts whose activities, while not of such a general description as those of cities and boroughs, were of greater immediate importance to the welfare of the country since they tended to the opening up of the country for the purpsoes of settlement and for the purpose of enabling the people "to market their produce. If there were any ray of hope of increased borrowing facilities they trusted it would shine first on tho country local bodies. Mr. Brown also addressed the Min- - ister. Mr. Myers said he had found that owing to the numerous applications that had been made to the Government for advances from time to time it was necessary to call a halt and endeavour to review the whole position. It had now been decided that applications for loans up to £SOOO alone would be considered. In two years over two million pounds had been advanced to local bodies. They would realise that no Government could grant ad lib. to any local authority. Though the majority of the applications were of a desirable kind, there was an inclination, on the other hand, with some local bodies, to go in for luxuries when they thought they would be able to obtain whatever money they required. He agreed with Mr. J nil that preference should be given to those country settlers who wished to obtain bridges roads, and other necessities. His sympathies were entirely with them and applications of that kind would be more favourably considered than those from more .settled districts where the money was required for town halls, etc. In no part of the .world could local bodies obtain their money more reasonably than in New Zealand. When the money had been obtained it was wise to think of extinguishing the debt, and therefore the GrCA'ernnien had decided that the interest should provide for a sinking fund, thus, though a little over 5 per cent, was charged for the money advanced to local bodies that really meant only 3:,' per cent, interest, as there was a sinking fund to extinguish the debt in 33V years. The Dominion had to pay for the money borrowed, and it was only right that the people who were getting the money should bear the responsibility. He did not think there was much chance at the present time of any alteration in regard to the previous decision as to only lending up to £SOOO. and then giving preference to local bodies who were carrying out necessitous works. The circumstances would justify no other answer. "I fully realise, of course," the Minister concluded, "that in a young country like this local bodies will require to borrow money, and a question that is being considered is as to the possibility of helping local bodies by guaranteeing their loans to enable them to get the full value for their money. Nothing definite has yet been decided upon."

11l the course of his reply, Mr. Myers said that no less a sum than four million pounds, had been advanced to local bodies since the inception of the Act, and, since the present system of charging interest and sinking i\*id had come into force, some two years ago, the sums advanced or promised had amounted to £2,324,920. The CoTal amount owing by local bodies in New Zealand, apart from loans from the Government was nearly £17,000,000. The interest paid on this sum, apart from any sinking fund, was £4 lis 7d per cent. Three millions were at over '■'< per cent., and H millions at 6 per cent, aiul over. The president of the Counties Association, Mr. Jul], suggested that the Minister should ascertain what proportion of the Government advances had gone to country lecal bodies. That would strengthen'him in his desire to give preference to advances for country local bodies. "We are very appreciative of the Government's assistance in the country districts," said Mr. .lull, "though contrary opinions are sometimes expressed, and our appreciation becomes keener when the supply is cut off and other people who have loanable moncjhave to be approached."