LOANS FOR LOCAL BODIES.

Taranaki Daily News, Volume LI, Issue 225, 16 September 1908, Page 2

LOANS FOR LOCAL BODIES.

1M NEW PROPOSALS. By Telegraph,—Press Association. Wellington, Last Night, in tlie lfcuso of Representatives today, Sir Joseph Ward moved Hie seconu | reading of tile Local Bodies Loans Amendment Will, and said the Govern- s meat could not go on indefinitely \ findiiij{ nil loan moneys required by „ local bodies. The Bill provided a \ scheme nii'!iL*]iy a local authority in- \ stead of procuring loans from the (jo- ( yenmient under the Local Bodies Loans Act, 11108, can raise loans from juuiiic debentures guaranteed by tlie Government, thu aggregate amount lo lie guaranteed in any one year not u> ex- . ceed J*aOI),UOO. In res-poet of every 'guaranteed loan the local authority : must establish a sinking fund r.v tue ■ hands of the Public Trustuc of not less ■than one per cent, of the loan, half of this amount being paid by the local authority imd the other lialf by uie Government by way of subsidy. lie considered this a most beneficial schema, and thought under the circumstances the Government were entitled to ask local bodies to invest tlierr sinking fund in public securities. The I'remier, continuing, pointed out that t/i.Government's liability for any loan would be the prelude to a wider measure of local government in this country, and it would relieve the ever increasing burden 011 the central authority. .Mr. Ilerrics said all sections of the House would help to pass the BH!. which local bodies had been clamoring for. He would like to know, however, if the Government intended this measure to supersede the Local Bodies Loans Act. Sir Joseph Ward: No; it is an addition to that Act. Mr. llerries said he would like to know What principle the Government would follow in discriminating between' various bodies applying for guarantees ■ as they approached the .MOO.OOO limit. During the first jvflr or two there was ! sure to be a rush, and lie thought : struggling local bodies should get pre--5 fciv.nce over more wealthy municipal 1 bodies. He also thought there should 1 be some system of inscription whereby t the stock would be quoted on the Stock 1 Exchange. f Several members spoke in general c support of (he Bill. Mr. Hogg expressed the hope fnatj e the Bill would mot result in the practical withdrawal, or even reduction of, 1- the Government's assistance to settlers in country districts under the Local k Bodies' Loans Act. 1- Mr. Sidey congratulated tile Govern is mcnt upon tlie measure, which wouh is lie of great benefit to local bodies. Mr. Jennings feared that the Bill f<tv .0 oreil the thickly settled districts, wliib it was the backblocks settlers tihat re 17 quired assistance. .Mr. Jlasscy agreed that tire back d- blocks' interests must be safeguarded 0- Whiln generally favoring the measure iy lie nevertheless felt that it wouh ly chiefly help the wealthier local lioilie t'e in settled districts. "ft was obvioud- too, that money was going to cost k oil bodies at least 4 per cent. He Ve.i hired to assert that this nieasur would not reduce at all the demand upon the Public Works Fund. He fel that audi reduction could only ensti from a complete, reorganisation of <ni system of local government. He though of it very unfair to expect local bodic ml to place all sinking funds in the hand vn of the Public Trustee whether the loan wews guaranteed or not.

Tlic debate was continued on similar lines by Messrs. Ross, Mandcr, Witty, lill, and Duncan. Mr. Ngwita said the Bill was a Liberal measure wliii't would require amendment in committee to enable Native Township Councils to bike advantage of its provisions. Mr. James Allen favored the Bill, but thought a more liberal measure still would be required to relieve political pressure 011 free roads and bridges. Tile vote provisions of the Bill did not compare favorably with those of the Loans to Local Bodies' Act. Continuing. Mr. Allen said that under the former Act money was lent by the Government for Si-years at 3% per rant. Under the present measure the local bodies had to go to the open market, paying -i'/i, per cent, for 33 years, flu hoped the Government would not reduce the operations junior tlie Loan to Ixic-.il Bodies' Act. Mesrs. Barclay and Okey continued the debate. The Prime Minister, replying, said the Government could only refuse loans to local bodies under the the Loans to Local Bodies' Aet under conditions mentioned in thu Aet. The Government had ever been made. He thought it had no intention to reduce operations | under that Aet or to reduce subsidies to local bodies. No sueli suggest : ou would 1),. unwise from the pohlt of 1 view of financial stability of the conntry to inscribe guarantee stock. The Bill would be of great use to bodies wishing to borrow larger sums than the present state of the law permitted. Continuing, Sir Joseph Ward said lie did not think the proposal would increase the rate of interest to private Iborrowers, Guaranteed debentures' j yielding 4 per cent, would tempt, over--1 sen investors. 1 The Bill was read a second time. The House rose at 12.10 a.m.