LOAN NEEDED.

Auckland Star, Volume LXIX, Issue 65, 18 March 1938, Page 14

LOAN NEEDED.

mt. albert borough, appeal to government. COUNCIL'S RATE PROBLEM. Some 70 SO ~ni|.l.n.w of the Mount -Albcr; gh t uuncil are |ikel\ to lose their em ploy men [ ii the council i, unable to secure a l..an of £42.srlM» to eairy out it*- present «'nrk< |'ii'«Kiinme. t t lie Fame time the c< ■ 111 n ; I w ill be fined with Inning to make an increase In trie rates to meet a debt i.r t'Jo.oilii incurred .ill capital uhi kr~ already arried out. The council may have t■ > levy an extra £.1111 Ml to £7IMIO in anuua'llv for the next three .>r four vears. I liese point* are >et nut ill a joint flatement i-.-ued by the Mavor of Mount .Albert. Mr. 11. A. A nders.'.n. and the I ~W|, Clerk. Mr. T. K. Oongal'.oll. Ijie statement makes it clear that. After unavailing efforts over «oine months to raise a loan for its capita! "works, the council was advised by the Jlinister of Finance, the Hon. \Y. Nash, at the beginning of this month that Arrangements hail been completed for the State Advances Corpora t ii", to t ike tip the portio.i of the council's loans required tor its works programme for the ne? t 12 months; but the council's difficulty, it is explained, is that in the financial year now closing expenditure

totalling £20.000 on capital works has been inculred out of overdraft on the general account in anticipation of th<? loan money becoming available.

Referring to the efforts the council has made the Mayor and the Town .".'lerk state that an application was submitted to the State Advances Corporation fix months ago, following an announcement by the Minister that arrangements had been, made for the Corporation t.> meet the requirements of local authorities. In October the Minister said it ■was not intended that the extra finance should he used for taking tip the loans all local bodies, and that it was hope! the stronger bodies would eo-operate ■with the Government and endeavour to place their loans with other investors.

"Mount Albert has. over since the programme of works was put in hand, made every endeavour to locate the money from outside sources at the rati' of interest allowable, namely, 31 percent." adds the statement, "but ha J failed."

In view of the growing aonteness of the position the council sent a deputation to interview the Minister in Wellington, and in his absence the council's position was placed before Mr. J. A. Lee. who promised to make strong representations to the Minister.

According to later advice the matte'' has been under consideration bv the Treasury, but the council has been informed that certain difficulties may arise because the capital works n* Mount Albert in tiie current year have been financed on day-to-day overdraft and not by the hypothecation of debentures to the bank. The inevitable crfnsequence of failing to obtain the £20,000 expended, it is stated, will be the necessity of adding to the rating burden a substantial increase each year until the amount is recouped. Such /a ratin; increase might make it impossible for the "ouncil to carry out further capita? works for several vears.

"The main reason for continuing the ■works has been to assist the employment situation and to keep together a body of 70 men who have given excellent service to the borough," conclude-! the statement.