STATE ADVANCES.

Dominion, Volume 3, Issue 799, 23 April 1910, Page 15

STATE ADVANCES.

POSITION OP LOCAL BODIES. EEMAEKS BT MR. MASSEY. Discussing th© establishment and operations of tho Stafe Guaranteed Advances Aot.iMr. Massey (Leudor .of ..the Opposition) made -tie following observations to a Dunedin reporter:— ' ' : ,' "I think a mistake was made.last session in repealing that part of the .Government Loans to Local Bodies Act whioh allowed the smaller local bodies—such as bounty councik and road boards—to borrow money at low rates and on easy terms from the Government—terms by which the sinking fund was provided from the ordinary revenuo of the Dominion. These local bodies are now being placed ut a disadvantage compared with what was ; formerly the case. Under tho old Act oounty councils couldraise a loan for a term of 41 years, paying 3J- per cent, per - annum therefor, and at the end of that time the loan TCas.wipod out by the interest which was paid having provided a sinking fund; Under the now Act, supposing the Government is able to lend at 8J per cent.; it will'require an annual payment by way of sinking fund of - £1 '7s. 6d. per annum to wipoiout-theloan in 361 y«ars. Thns the ■• present position is that a loan costs, a county. £i 17s. &:!. per cent, per annum for -36J years, as against £3 its.- per annum for 41 years. In addition, under the present 'arrangement there is an initial charge to the county of ,10s. per cent, for cost connected with the raising of the loan. Altogether ttio Act of hist year marks the embarkation on a wider and more ambitious scheme, and as under its scope tho Government" will have more numorous applications, it will require to bo exceedingly careful in its administration, as it will have much larger sums of public money to' handle. With specinl regard to this amendment which is suggested to perniit of an extension of the scope, of the Act, I quite see tho difficulty about a borough council, for instance, borrowing part of its mon«y from the State- nnd being compelled to to upon the open market for the balance. But for all that, I certainly do not think thut the credit of the country 6hould be pledged for the purpose of providing municipal theatres or municipal pleasure grounds." ■ ■