Evening Post. SATURDAY, NOVEMBER 2, 1907.

Evening Post, Volume LXXIV, Issue 108, 2 November 1907, Page 4

Evening Post. SATURDAY, NOVEMBER 2, 1907.

LOANS TO LOCAL BODIES. Tho Houso of Representatives was quite a happy family *,v Thursday even- ! ing when its members returned from the Palmerston show to discuss the Local I Bodies' Loans Act Amendment Bill. ] Mr. Herri es beamed approval on the I Premier, and Mr. Hogg almost did as much for the- Leader of the Opposition, and nearly everything in fact went as merrily as a marriage boll. The only discordant noto was raised by the inevitable difference as to which party was really tho originator of the idea embodied in the Bill, but this is the sort of question on which politicians must always agree to differ, and it did not _rniso any serious commotion. Tho provision of an "assured finance" for local bodies has been a part of tho stock-in-trade ( of every politician from time immemorial, and a Governor's Speech which failed to pay it a sonorous but meaningless tribute would hardly be complete. But in the Financial Statement the Premier went beyond these amiable generalities, and made a definite promise. During the financial tightness occasioned by the stress of the Boer war, tho increased rato of interest at which the Government had to borrow necessitated k corresponding increase in the rates which it charged on loans granted to local bodies. With the easing of the money market which has since taken place it is reasonable that tho local bodies should get tho benefit of a reduction in the rate, and tho promise of tho Budget wa3 that the rate of interest on existing and future loans should bo reduced by a half per cent., bub not below 3i per ce-nt., me lowest rate at which the Government can obtain money /or tha purpose of these loans. This promise is made good by tho Bill which was before tho House on Thursday. By the Local Bodies' Loans Act of ISO 3 the amounts, payable for interest and sinking fund were fixed at 5 per cent, on a loan repayable jn twenty-six years, 4i per cent, if tho period was thirty-two years, and 4 per cent, for a- period of forty-one years. In reducing these rates by a half per cent, all round the Bill simply restores tho position to what it was under the Act of 1901, and performs what Mr. Hurries called "a tardy act of justice to the local authorities." But in making iho reduction apply to existing loans the Bill is surely something more than just. Justice would stop at such a reduction in case of loans to bs hereafter granted, but there- is a very large measure of generosity — larger than a strict adherence to ordinary financial pi'inciples would warrant — in making tho reduction retrospective, since the State cannot secure a similar reduction on tho money which it has already borrowed. A'o objection, however, was raised on this score- in the House, and in view of tile immense inipoitnnco of promoting the great work of settlement, it was natural that membeis should be. disposed to slioteh a point. The valuable contiibutions made to the general work of government by the enterprise of local bodies in this respect were properly emphusised in tho Financial Statement, and a very laudable desiro to extend this sphere of activity was displayed during the debate on both sides of the ITouse. For tho Opposition Mr. Janws Allen, and for the Libeials Air. llanan, both urged that a further reduction of the rate of interest charged to local bodies would eiuible them to borrow moie freely for ioiuL construction and other necessary woTks, instead of continuing their incessant applications for uiants from the Public Woiks FunJ. Particularly gratifying was Mr. llanan's strenuous advocacy of compiohensirc legislation on the subject which will put local finance on a sounder basis than these demoralising appiuls. We trust that tha member for InvercargiU will stick to his brief until he has eaniod the matter to a &uecesbful issue. As we have repeatedly urijccl, no greater or more urgent problem demands the attention of New Zealand statesmanship than the elimination of roads and bridges from general polities, and this can only bo. done by .. change- of fcln> kind suggested by Mr. llanan," which will at the same time enlarge the powers, the lcspousihilities, and the solf-Tespoct of the local authorities. At the present time the dependence of lo",al woiks upon the favour of the geiißial Government, and P.nliament makes the sriont of tlin necessary monoy "fiom tho l r nblie Works mind a species of political alms, the handling of which, as is always the ease with ill-regulated charity, is deg-radinj; to givpr and receiver alike Tins reform is for the future, but we trust the near futuro; and :n the meantime/ we are pleased to Bee. that' the Bill passed successfully through committee last nijjht, after n useful protest by the Premier against the theory that Iho boi rowing powers of the Government' we ret limitless. '1 he theory will have fewer adherents when loxvJ 'wntks .liAYb tc/ bA localht financed. .,