SCHEME CONDEMNED

Dominion, Volume 24, Issue 143, 13 March 1931, Page 11

SCHEME CONDEMNED

Earthquake Relief MR FORBES’S PROPOSAL “Almost Entirely Futile” INDIGNATION AT HASTINGS Dominion Special Service. “I fail to understand why the Government did not adopt the main principles of the scheme published in the “Financial Times,” said Mr. E. A. Maddison, during a meeting at which the words “futile,” “inadequate,” and “useless” were used by some of the eighty professional and business men, who unanimously condemned the Prime "Minister’s million and a half loan proposal for partial restoration of earthquake damage in this district. The Mayor, Mr. G. F. Roach, said: “I feel the Government should have adopted the ‘Financial Times’ scheme almost in its entirety. It was the right scheme, there is not a shadow of doubt about that.” Another speaker pointed out that Mr. Forbes said he would not raise an external loan as that would injure the credit of New Zealand abroad. Yet in the same breath he promised to make provision for a loan in the future. The meeting unanimously passed the following motion:— "That this meeting, representative of the citizens of Hastings, resolves that the proposed scheme of finance.for the rehabilitation of the devastated areas of Hawke’s Bay would be absolutely inadequate in amount and unsatisfactory In operation, and that the scheme propounded in the ‘Financial Times’ or a scheme on similar. lines would more likely meet the case; that a committee be set up to demonstrate to the Government the relative merits of the schemes of the ‘Financial Times’ and that drawn up by Mr. A. E. Jull, M.P." Letting Parliament Know.

The Mayor said the town had pinned its faith in the “Financial Times’s” scheme with modifications. It was the town’s duty to let Parliament have an expression of opinion.

Mr. A. S. Tonkin said Mr. Forbes himself acknowledged that the proposed loan would be insufficient for the purpose. It did not cover the losses of stock; also, as it did not cover existing loans it would not help the mortgagor, and mortgagees would have to some extent' to be satisfied. It would be impossible for a mortgagor to wipe off an existing loan and at the same time take up a loan from the million and a half. The man- who presented ,the best case earliest would have the best and earliest treatment Very many were at the same time mortgagees and mortgagors. It had been rightly pointed oilt that there was a danger of the Government raiding the loan as it had raided the highways fund and the land transfer fund. Further Impoverishment. Mr. Maddison said he was amazed, when he read the Prime Minister’s proposal, which would only mean further impoverishment of the district. No local body "could stand the added burden the proposed loan would entail, and the £250,000 share for local bodies would inevitably involve ultimately striking a rate. ■ '.... ; “It is an absolute barricade to rehabilitation,” said Mr. Maddisoii, “and condemns us to remain in our tin huts for years to come.” The town would be unable to rebuild; unemployment would ensue; the country would have to come to the assistance of i those out of work, and thus would be involved as a whole in any case. The working man and the farmer would not benefit. No one more than they needed assistance. Mr. P. Ashcroft, of Napier, said the proposal was almost entirely futile and failed to touch many of the district’s problems. It merely covered the reconstruction of buildings, which was entirely useless. For example, there was a wholesale firm in Napier which had been trading there for seventy years. It had paid thousands in income tax, always paid dividends, and had given much employment. Its building and stocks were destroyed and the books had gone. What was the use of telling a firm like that that there was now money available for a new building. What was the use of a new building to it? i Mr. Roach said the proposal did not cover the losses in stocks, fittings and plant. Mr. Forbes’S' Promise. - Mr. H. R. French said when Mr. Forbes was in Hastings he told them the people need have no financial anxieties and that the .disaster would, be treated from a national point of view. Now the Government: was merely, proposing to advance money to. certain people whose losses had not been nearly as great as those of others who would not benefit at all. Instead of taking a statesmanlike point of view the Government was going along in a little pettifogging political style, in a spirit of “look out nobody steals a march on us!” He would like to know the amount of insurance cover held by the State Fire Office and coming within the terms of the offer to pay claims. Mr. J. A. Simson: Forty thousand. Mr. French: That is mere bagatelle compared with what the insurance companies would hare to face. Insurance Companies’ Attitude. Mr. J. S. Butler, a leading accountant, said the “Financial Times” proposal that the companies pay 20 per cent, would Involve a million. It was not likely that the 'companies would make such a gift. Many business people had lost buildings, stocks, and plant, and perhaps their section was not equni to the value of the mortgage on it. Their book debts were of doubtful value. What was the use of a loan to such people? If they were insolvent before they would be just ns insolvent after getting a loan. The “Financial Times” scheme would not involve the Consolidated Fund; in fact, it would benefit it by easing charges that the fund paid for the relief of unemployment. Mr. Gordon Roach, who went to Wellington as a member of a deputation of insured,•. said the deputation was convinced, after consultation with the council of the Underwriters’ Association, of the impossibility of getting an ex gratia payment ns suggested. The council rightly held that reparation was a national matter. The deputation left satisfied it would not be a fair thing to ask for an ex gratia payment. REHABILITATION SCHEMES Proposals in Brief The “Financial Times” scheme for financing restoration work in Hawke’s Bay v.as outlined in “The Dominion” in its issue of February 10. The scheme provides for the granting by tbe fire insurance companies of an ex gratia allowance of 20 per cent, of the loss each fire office would have sustained had such damagf been covered by the insurance in force; in addition the insurance companies meet ail losses they would have sustained had their policies covered this form of loss, such additional moneys to be" reimbursed by the State out of a ten million loan to be raised in London at 44 per cent. Repayment of the loan, together with interest, is to be made by means of a surtax on insurance premiums. Mr. A. E. Jull, M.l’. for Waipawn, "advocates a somewhat similar procedure regarding the raising of n loan and its repayment, but does not advocate any ex gratia payment by the insurance comvatae*.