SINKING, FUNDS.

Dominion, Volume 2, Issue 440, 24 February 1909, Page 8

SINKING, FUNDS.

POSITION OF LOCAL BODIES. DEPUTATION TO HON. J: A.' MILLAR, ~<BT TKLStiBAPB.—SPBCIAI. COURKSPONDBNT.J : '■ ■; . Dunedin, February 23; . '; ■ This morning'., ii deputation, of the. Finance Committee: .of the \ : Gity- Council .waited - on. tliq Hon. J. A..-■ Millar,, to object to. the provision passed by Parliament: last session .in .the Local Bodies' Loans; Amendment Act, whereby, instead of tho iof...the ; sinking funds in connection : with their .loan's; being: entrusted t-o their own commissioners, local bodies shall,' in future; appoint.'for that purpose none but tho Public Trustee, whose channel for investment; shall jbb ; limited : to New Zealand GovernmentY'securities; : -■ V

Tho Minister replied that last year, tho •Government had:brought down:this.particular Bill', with. tho. idea that by a .fairly largo loan on. behalf of local '.bodies■ consoli-: dated and Government' guaranteed,,- better terms' could be.'-obtained, from .the, •'lenders.r The- Prime Minister, bad told .'the Auckland deputation that, their r best .course would be 'to;; petition' ) whoso .Public Accounts Committed would, investigate'' the I grievance./' Ifj after .that,: ( tho.;Hbuse, d.esired I it, the whole Act], could be repealed. ' From one point, of view., hewould .be'iglad '.to-'see this done, as under tho Act the Government contributed } per; cent. V per annum to . the sinking. fund. . It Svas :a : certainty' thiaVthe Government would not guaraiitee loans unless the sinking funds .thereon; were paid'in .to the! Public.. Trustee. ,Although ; :in Diincdiu and other places the sinking funds had. boen well administered. by commissioners,, it 1 ' must not be, forgotten;-that;in, the' large - -cities there had been an inflation of tho values of' the. mortgage , securities on '; which' the money -was 1 lent,V owing' .to; timds . and crowding, .caused by rapidly-increasing 'populatiojii' Councillor Gilkispn,. had been .. mistaken :■ in saying that '(the ■Public.'Trustee : would only. obtain;:3i-, per .cent.,, interest on his ments. The*-present Tate was ij, per cent., and:it had .been as high as 5 per! cent. YCoun-: cillor•• Gukison'; had: also; :to rpmember*: that a. quarter "of- a million : would' not- be with-: drawn from circulation :all at,'once by the change^in. : administration .of the .fund, and again , the same avenues ofy-investmerit would be open .to; tho Public Trustee- as to- the commissioners. .-v- ' ;- - . •

■ Councillor ..Gilkison: No.". He-is limited--to Government securities. • • • • . '

. 1 Minister reminded' the deputation that all mortgage;securities did not turn out well, as,' for .instance,, those in, which -the Kartangata relief fund .were invested; and also' mentioned a statement' relating tb ' the percentage, of- sinking ..funds ' invested: by - .the Mayor and Council of Wellington through the firm 'of' solicitors to which the former.belonged., i Minister, after again, remarking . that he would be, glad :to see the whole Act repealed, as thereby the. Government would be relieved -of contributing practically' half 'of. the sinking, funds, of local - bodies' loans/ said, that .in his capacity as member for,the district he; would place the corporation's'.views" before Cabinet as strongly .. as he .could. Whatever deoision . Cabinet came.- to : in.'the , matter. thereafter ho would of course bo bound to,uphold." If the 'City 'Council l peti-' tioned Parliament," the; matter would' bo: gone 'into by the: Government, who' would / be influenced in any subsequent action by : the report of tho Public Accounts Committee ■