THE BOROUGH LOANS.

Taranaki Daily News, Volume L, Issue 59, 29 May 1907, Page 2

THE BOROUGH LOANS.

A PECULIAR POSITIOX. 'J'lie Finance Committee of (lie New Plymouth liorough Council submitted Hie following report on Honday night: "i'he estimates for the completion of tin- electric lighting system wen- considerably too low, and in the early purl of !!!!)(> certain payment*, a. considerable am. unt of which were contract moneys I

iluc In the finish Company, became due. I'h" previous loan was exhausted, and the Council were compelled to advance the no .;.ar,v funds from the general account, misting to he able to reimburse that aciounf by the notation of a new toan. This had also been done in connection with two previous loans raised bv the Council, and no objection wis iai,ed either by the Auditor-Ccnoral or by lie

money-lenders Many oiher hor.'ingiis have from time to time adopted this course, anil the validity of their loans has never been questioned. One nm • able instance was that of the Wellington

City Council, where some A14">,00!( to .tnO.OOO was spent out of overdraft, mid subsequently raised after a vote of liie ratepayers had been taken. "Helving upon their experience in ae previous loans, the borough council ioak. ,i poll of the ratepayers and proceeded to raise a lean of c|l),(lllll, a portion of which was intended to be used to repay the moneys advanced from (he general final The loan was offered to the; A.JI.P. [society, and adopted by (hem subject to the opproval of their solicitors (.Messrs Chapman and Tripp). -Notwithstanding the fact that they had alrealy accepted a loan cf £7OllO previously raised by the Council, and which was on ad fours with the present Joan, the solicitors'to the Society raised a point tint a special loan could not be. raised :\.r the purpose of paying liabilities incurred in connection with a public work, 'out that the powers were limited to the raising of funds for future expenditure. Mr T. F. Martin, agreevl with this opini.ni, but submitted an easy way out of the difficulty by completing the whole expenditure, out of overdraft, and and then pasisng a special order under section 11 of "The Local Bodies' Loans Act 1001.'' The point was afterwards submitted to Messrs Findlay, Dalzioll and Co. (solicitors to the Bunk of New Zealand) »ml they advised that 'We are not satisticd that the powers conferred by section 1! (under which the loan was rai-ed) are limited as suggested. There appears to us to be no reason why the ratepayers should not authorise a special loan for the purposes of a public work as well after as before the construction of that work has commenced' However, in view of the opinions of Messrs Chapman ant Tripp and Mr. Martin, they felt that the point must be doubtful, and that it was not advisable for their clients to take up the debentures. '•Two other leading solicitors of the colony take the same view that the technicality having ben raised it is not sifc to issue the debentures. "Under these circumstances, after perusing all papers and correspondence the borough solicitors advise that the only course open to the Council is to promote, a local bill to validate all th° proceedings. The bill has been drafted.' "The committee recommend that the advice of the borough solicitors to promote a local bill be adopted, anid that the finance committee have full power to deal with all matters arising thereout.' The report was adopted.