The Press. WEDNESDAY, OCTOBER 2, 1912. LOANS TO LOCAL BODIES.

Press, Volume XLVIII, Issue 14475, 2 October 1912, Page 8

The Press. WEDNESDAY, OCTOBER 2, 1912. LOANS TO LOCAL BODIES.

•The debate last night on the sensational statement made by the Minister for Finance regarding the manner in which public money Has been lent to local authorities, was- remarkable in several respects. It showed, for one thing, that Sir Joseph Ward, -who undertook the defenco of his * administration in the matter, lias a very imperfect knowledge of the Act under which, the loans were granted. He appears to have believed that if the fall amount authorised to be raised for the purpose of loans to local bodies in any one financial year is not raised within the year, the balance may be raised subsequently, in addition to the amount then authorised. This is not so. The provision mentioned applies to the advances to settlers branch, but not to advances to workers or to loans to local authorities. In any case, it would apparently have made no difference if it had so applied, for all the money authorised to be raised seems to have been lent, otherwise the »Yard Government would not have imposed, in January last year, the limit of £5000 on advances to counties. It is noteworthy that after the imposition of that limit Timaru got tfver £50,000 of the £116,000 advanced to it under the Act, and the Itemuera Road Board received £79,000. Sir Joseph declared that neither he nor any of the members of bis Ministry had ever attended a meeting of the State Guaranteed

Advances Board, but as Mr Allen j pointed out, it is specifically provided j in the Act that before the Board can grant any application for an advance, the application must bo approved by the Minister of Finance in writing. As to the amount of money available until the end of the year for advances to local authorities, Mr Allen is in a much better position to know what be has than is Sir Joseph, or Mr Russell, and these gentlemen would have lK?on well advised to leave that point alone. Mr Allen's reply to the attack on his statement was so-complete and crushing, his arguments in defence of the attitude he had taken up were so oonvin-_;ing > that the debate left him in a stronger position than ever. He mado it clear that he was not accusing tho Board of being open to influence or political pressure, but ho contended, and most people will agree with him, that no honest man could say it was a right thing for the State to lend money at a loss to rich boroughs, and that tho policy which permitted such action was unsound. Mr Russell industriously trailed red herrings across the scent, but with little effect, and it must be fairly evident that he had reached the limit of his political resourcefulness when he pretended to tremble at the thought of what would happen when the Government began doing away with cheap | money and, later, the land for settlement scheme and the old age pension scheme. His simulated shivers of apprehension were quite unnecessary, rs Mr Massey indicated in a vigorous speech. In the end the whole matter was referred to the Public Accounts Committee, whose report will be awaited with somo interest.