TO GET CHEAPER MONEY.

Auckland Star, Volume XLVIII, Issue 35, 9 February 1917, Page 2

TO GET CHEAPER MONEY.

UNIONISM IN FINANCE. LOCAL BODIES' COMBINE MOOTED. A proposal of great importance to local bodies was raised at the Auckland City Council's meeting last night by the Mayor (Mr. J. H. Gunson), who circulated the following report lor consideration by the Council. The report was received and reserved for discussion at a laier day. Mr. Gunson says:— '"While at the present time it is admitted that it is quite inappropriate to suggest any works which can be reasonably deferred, yet it will no doubt bo admitted that it would be wise and pru dent to reasonably forecast the future, and even during the present period take steps lo provide for its requirements. (The time is bound to come, particularly in view of the rapid progress of this city, and with the progress of the Greater Auckland movement, when loan money for permanent works, of which man}- are already listed, and some of which are pressing in the public interest, will bo required, and the Council will be wise to look ahead. It is quite clear that the difficulties of local bodies individually will be very great, if not impossible, on practical financial grounds for some years to come. I therefore propose to submit to the Council at an early date a proposal involving, firstly, the calling together of representatives of local bodies throughout tiie Auckland province, with a view of considering unity of action in connection with loan requirements, and secondly, as to the practicability of the consolidation of loans in connection with their flotation, having in view the advantage to respective local bodies. THE PRESENT GRAB SYSTEM. "The present position seems to mc to be this. Individual local bodies conduct their own loan liouuions within their own resources, and in the case of the larger municipalities fur considerable sums. During the past few years various rates of interest have been paid, one local body raising a loan either locally or abroad at the same time as another, to belter or less advantage, but both at 'a high rate compared with the Government borrowing abroad. In some cases the deserving local bodies, where money is urgently and legitimately needed, have not been able to noat their loans. In view of what has existed in the past, it seems clear to mc that it will be accentuated in the future. With the rapid growth of the Dominion it is surely time that something was done to conduct loan flotations on more satisfactory lines. Tho days of cheap Government money by means of advances are numbered with the past. The Government to-day has fixed the maximum rate of interest, and rightly so, at 5": per cent, which is tbe first step towards unification of these interests. SUGGESTED BORROWERS' COMBINE '"If there could be some cohesion between the whole of the local body administration of the Dominion, if their ! financial requirements could be tabulated, carefully gone into, revised, and finally adopted as a whole, the amount in the aggregate would annually for some time to come amount to a large sum. Ii the local bodies of this province or the local bodies of the Dominion acted unitedly the Government could then be approached and asked to float from time to time, on the best possible terms which the Government, itself could obtain in the world's best market, a loan representing the total requirements of those concerned. Legislation for this would be necessary on similar lines adopted in England. The folly of the present local body policy is apparent, for up to the present we have the position of the Government borrow ing money abroad at a rate anytliins,from J to 1$ per cent to better advat.han the best local body flotations, am satisfied that by some united action and the support of the Government this disadvantage can be removed in the interests of ratepayers generally. I would like the councillors to give thiß tentative proposal, briefly outlined, serious consideration, with a view of considering some scheme in April next.