1.—15

We understand that there has been some discontent among certain local authorities as to this distribution of immediate authority and the relegation of the local authorities into a relatively minor role. If, as we said in another Section of this report, the territorial local authority is an important part of the government of this country, if its retention and strengthening is fundamental to democracy, then obviously it should be given the opportunity of accepting the wider responsibilities that are concerned with the economic and social development of the area in which it may find itself. Evidence is not lacking that, given these responsibilities, local authorities will respond adequately. In fact, we understand that in certain of the Regional Councils which have been set up the local authorities have insisted that the Council shall consist only of local-body members. This, we think, is a move in the right direction. We will, however, have more to say on the proposed activities of Regional Councils and regional planning later in this report. G. TRADING SERVICES Like their counter-parts in other parts of the world, many New Zealand local authorities are engaged in trading undertakings. The justification for such activity need not be outlined here, but generally it rests in the fact that local authorities are warranted in undertaking these services when, in the first place, the service is necessary for the well-being of the community, and, secondly, when efficient service requires a monopoly. The three services which naturally come to mind in discussing such activities are the provision of gas, electricity, and public transport. The provision of water could, for some purposes, be included under these headings, but as this is discussed under another heading it will be omitted from this Section: — (1) Gas Boroughs are given power under the Municipal Corporations Act to institute a gas-supply and do all things necessary thereto,'within the boundaries of their own territory. This power is permissive. Gas undertakings are controlled by the Board of Trade Act, 1919, section 26, which provides that regulations may be made for the " prevention or suppression of methods of competitive trading or business which are considered to be unfair or prejudicial to the industries of New Zealand or the public welfare." There are other similar provisions in this section; but control in such a field is necessary if undue competition is to be avoided. This control is exercised to prevent more than one gas undertaking in a particular district. In some of the larger towns, as, for instance, Wellington and Auckland, gas-supply is in the hands of a private company. In many other of the larger towns, as, for instance, Dunedin, Hamilton, Wanganui, Palmerston North, Nelson, and Invercargill, the gas-supply is in the hands of the municipality. In all of the other boroughs it is supplied by private companies. In quite a number of the smaller boroughs there are no gasworks. It is interesting to notice that Borough Councils which generate gas may supply it to persons residing beyond the boundaries of the particular local authority responsible for its generation. For instance, the Dunedin City Corporation gas-supply is also used to supply gas to St. Kilda, and this is duplicated in some other areas. The position here is very similar to that with regard to water, discussed previously. Naturally, in regard to gas there is a superior control with regard to the quality of the gas, and regulations under the Board of Trade Act, 1919 (gazetted 1929), laid down certain specifications as to quality. (2) Electricity Supply General control over the distribution of electricity in New Zealand is exercised by the Minister of Public Works, under the Public Works Act, 1928*. No person or institution can commence the distribution of electricity, or do any work in connection therewith, without the issue of a license by the GovernorGeneral in Council. Subject to the issue of such licenses, Municipal Corporations are entitled to supply electricity to the inhabitants of the borough or generally to the area specified in the licensef. Power is also contained in the Municipal Corporations Act to supply electricity to persons not actually living within the boundaries of the borough to whom the license is issued. Similar powers are vested in Town Boardsf and County Councils§. •In the early days of electricity practically the whole of the retail supply was undertaken by the local authorities from power generated in their own plants. Since the Water-power Act, 1903, however, the sole right to use water power for electricity generation purposes has been vested in the Crown, and the policy of successive Governments in the Dominion has been to give to the State a practical inonopoly||. With the growth in the economic importance of electricity, both for domestic and industrial purposes, it was necessary to systematize the distribution of electricity and to guarantee that it would serve the population as effectively as possible. It was decided in 1918 to establish in New Zealand a series of ad hoc Boards concerned solely with the distribution of electric power. The question of the setting-up of Power Boards has already been dealt with. There are at the present time 41 Power Boards. Since many of the boroughs and some other territorial local authorities had already received licenses and were operating within their authority under the Municipal Corporations Act or the Counties Act, and already had electric-power-distribution systems in operation, it was decided that, despite the passing of the Electric-power Boards Act, that they should be allowed to continue their distribution. The policy of the Hydro-electric Branch of the Public Works Department, however, in recent years has been to concentrate, as far as possible, distribution in the hands of the Power Boards, and a number of boroughs, which in the early days had licenses to distribute power within their own districts, have since been absorbed by Power Boards, but at the present time 35 boroughs (including six cities), three Town Boards, and five counties are responsible for the distribution of their own power. Two of the counties

* Public Works Act, 1928, sections 319-329. t Municipal Corporations Act, 1933, section 287. % Town Boards Act, 1908, section 33. § Counties Act, 1920, section 180. || Water-power Act, 1903.

28