FINANCING AN OVERDRAFT.

Auckland Star, Volume XLI, Issue 33, 8 February 1910, Page 7

FINANCING AN OVERDRAFT.

Mr. G. J. Garland asked for a financial statement for the Borough of Grey Lynn, which was submitted by the Town Clerk at the meeting of the Council last night. After it had been read. Mr. Garland said he was quite satisfied that the statement made by the late Mayor, upon leaving office, that tliore was no overdraft. wu.s incorrect. The statement just submit*" i showed that the Borough's overdraft on the Ist of April was £0984. The Mayor (Mr. W. J. Holdsworth): The overdraft has been reduced since then. We have no overdraft at the present time.

Mr. Garland: Those debentures which have been molted into gold to pay off the overdraft, will have to be met, for the overdraft is there all the same, only you are paying 4i per cent and 1 per cent finkinCT fund instead of 5 per cent on overdraft.

The Mayor: Six per cent. Mr. Garland: I always thought it was 5 pt>r cent. The Mayor said at a full meeting of the Council in committee the Town Clerk (Mr. Haultain) pointed out that it was bo use having the loan money lying in the bank, when it could be temporarily used for paying off the overdraft. The borough solicitor saw no objection to such a course being adopted, and the manager of the bank also raised no objection to that course being adopted. It was simply a matter of book-keeping. When the auditor came along on the 31st of March, they would simply get an overdraft to pay back the debentures, but tlicv had saved £210 interest in six months. At the same time they would find by the 31st of March that the overdraft had been considerably reduced. The last night Mr. Savers presided at the Council, he did so against the advice of his medical attendant, and not being well, he made the bold statement that the overdraft was nil. knowing that all the councillors were aware of the true position. If the Council had done wrong. the ili'bentures could simply be repaid by means of another overdraft.

Mr. Garland: I say without fear of enn -idiction that the method adopted is ::ut a legal one. Tii , Mayor: You were present at the meeting of the Council in committee when it was decided to adopt this course. Why did you not object then? Mr. Garland: I .simply thought it was to be borrowed from ono loan account for temporary use in another, but not to pay off the overdraft. On the motion of Mr. Murray it was docicled to get a written opinion from the borough solicitor as to the legality of the course adopted.