LOCAL BODIES' LOANS.
EFFECT 01' THE UOVKUXMENT'S .\E\V SCHEME, PRIMK MI.NMEK Sl'KAivS ULT. ] Bume very plain nnd direct statements 1 were made by liie Prime Minister, Sir ; ' Joseph Ward, when replying to Uie re-j 1 presentations made, to him in connectionwith ihe Stale lUiarauteud Advances Hill by a deflation lrom various local bodies in the Wellington district. It was explained by Mr. Wilfurd that Ihe deputation liad been primarily arranged iii the Linwv Hull, lVtone, and i Onflow iJorough Councils. I'nder the present Act a local body was entitled to a loan for t'orty-o:ie years at iJ'/j per cent., and at the end of the term the principal was extinguished—in other words the (lovi-nmient provided the sinking fund for tins purpose. .During last year Hie Government hail paid C40,(il)0 towards .sinking funds for local I public bodies. But under the new State | Guaranteed Advances JJill a loan f»r J thirty-six and a half years at V/., per vein, would not become extinguished at the end of the term. The local bodies | would be ill a worse position than be- j fore, for they would now have to provide their ouu sinking tunils. It also pean-d to him that a harbor boaid which had no power to levy vales could not conn- under the scheme. This latter aspect of the matter was also referred to by the Hon. A. R. dimness, who said he had already consulted Mr. A. R. Wilford on it. Greymouth wa* particularly, interested, inasmuch as it hoped -to be able to raise a certain . amount of money for necessary harbor works.
QUITE UXTHIMCABLK. The Prime Minister said that now the old system of lending lo local bodies was to be repealed, Jie wished to declare ipiite frankly that the Government had not the slightest intention of embodying the sinking fund principle in tho newer and larger scheme. During the next fifteen years local bodies might, borrow ten or fifteen millions of money, and the Government simply could not think of doing what the deputation asked. He would not dream of doing it for a sipgle moment. It would be a mad tiling to attempt. If local bodies' were not prepared to take the money at 3 J / a per cent, and provide, the sinking fund, then they should do without it. Some local bodies wanted £50,000 and over, and were being strangled at the present time because they could not get it. But under the new system they would be able to borrow it, and at a reasonable rate, too. In the past the amount of money that could be lent to local bodies in any one year was limited, »o that tne imposition of the sinking fund should not press too heavily on the whole hotly of Uie tvopie. Jf the House did not want the -system now proposed, it could say so. and they could g-o along on the old Anyone who thought the country uas going to be saddled with the sinking funds under the new system was making u great mistake. The Government. niight be able to borrow Hie money at 3 per cent. Mr. Masssy: Not net!
The Prime Minister wont on to say that the loan charges would 'have to be met, but lie believed the (lovernrnent would be able to obtain the money at 3 per cent, and that in no case would the borrowers have to reimburse the department by way of interest charges for the cost of dotation of the loan. As to the position in relation to harbor boards, he had given it very careful consideration, ami while he was prepared to do all lie could, it was an undeniable fact that many of these boards wanted to borrow huge sums of money, some as high as .1!J.000,001). For that reaso.i he could not see his way eleav to include tlie harbor boards in the scope of the Bill now before the House,
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Taranaki Daily News, Volume LII, Issue 232, 5 November 1909, Page 4
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656LOCAL BODIES' LOANS. Taranaki Daily News, Volume LII, Issue 232, 5 November 1909, Page 4
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