MONEY FOR ROADS.

Auckland Star, Volume LVII, Issue 276, 20 November 1926, Page 19

MONEY FOR ROADS.

LOANS FROM HIGHWAY BOARD. POWERS OF LOCAL BODIES. PROCEDURE TO BE FOLLOWED. (By Telegraph.—Press Association.) WHANGAREI, this day. out of the authority of "the Main Highways Board to make loans to local bodies, the Whangarei County Council applied to the board for a loan of £40U0 to meet the council's gbare of the cost of reconstructing the highway between Otonga and Hukerenui. The board replied that authority to raise the loan under the Local Bodies Loan? Act would be necessary. In order tn ascertain the legal position the Counties Association recently submitted quest ions arising out of this situation to its solicitor, Mr. T. F. Martin, and a copy of his reply is now to hand. The questions and the answers are as follow: — Question 1.: By section 2 of the Main Highways Amendment Act, 1020, the Main Highways Board is empowered to lend the sum of £50.000, and the executive of the association desires to know whether county councils are empowered to borrow moneys by way of loan* from the board. and'repa'y such loan by annual or other instalments without taking a poll of the ratepayers or county electors? Answer: The County Council can give the Main Highways Board as security for an advance, made by it under section 2. debentures of any loan legally raised by the council for an authorised purpose and that have not already been issued to purchasers. If that loan was legally raised without a poll then debentures of that loan form a good security to the board under section 2, but where a poll was necessary, the debentures offered to the board under section 2 must have been authorised to be issued by a poll. Question 2: What is the correct procechire for county councils to adopt to obtain the benefits provided by the Mnin Highways Amendment Act," 1926? Answer: The county council should apply to the Main Highways Board for any advance it requires, offering as security for the advance the debentures of any loan lawfully raised by it for any purpose. The main obiect of the section is to enable the advances to be marie out of the revenue fund of the Main Highways Account. The board dons not purchase the debentures, but holils thfrn as security only, and would apply the half-yearly interest on the debentures in partial reduction of the interest and principal payable under the advance; in other words, the debentures would be mortgaged to. not taken up by the board.