INTROSPECTION.

Evening Post, Volume LXXVII, Issue 137, 11 June 1909, Page 7

INTROSPECTION.

♦ THE CITY'S ACCOUNTS. REPLIES TO DR. NEWMAN. MR. HISLOP EXPLAINS THE POSITION"Our finances are not in a happy position, and councillors must face the fact that they can only be put right by then- persistently pursuing a policy of .real economy through the whole year. The council has no money whatever for luxuries. They must wait till next year. We have to face a falling revenue and unforeseen, unusual expenditure. The council cannot shut its eyes to facts, however ugly, but must work so that our finances are put on sound business lines. . . "I find that last year £15,000 was raised by way of loan to build the abattoirs, which will cost that abattoir, which will cost that paid for. Unfortunately, this money was diverted last year to anothei purpose, viz., to paying off an old loan, and the cost of the abattoir must come out of the district fund, i.e., out of overdraft for the present to the extent of £10,000." — Dr. Newman, at last night's meeting of the City Council. The sermon preached by the Mayor last night, on the two texts quoted, is given at some length on another page of this issue. The statements should serve to bring the city's accounts conspicuously under the community's notice. THE HON. T. W. HII§LOP'S REJOINDER. As the late Mayor, the Hon. T. W. Hislop was head of the administration during the period reviewed by his successor, 'he was invited by The Post to reply to the criticism. Mr. Hislop referred more especially to the present Mayor's statements. regarding loan transactions. The true position, the late Mayor said, was that a loan .of £51,000 came due. It was partly held by the A.M.P. Society, partly by the Citizens' Life Office, and partly by a number of shareholders. The city had in hand, tpwards it, a little over £3000. bo it required to raise, he thought, without providing for discount upon the raising, about £48,000. The A.M. P. and Citizens' Life both, intimated that they would not renew. He arranged with most of the shareholders to rene^ at the old rate of 4 per cent.,^and he got an additional loan of £25,000 at the same rate. Thus there was £42,000 available. The question then arose whether (because the corporation was still short £6000) it would be better to temporarily raise the £6000 out of general fund or issue a loan ar4£ per cent., and he found that the council's general account would stand the £6000. The extra charge involved by this was only one half per cent (that was, £30 per annum), whereas, had the whole loan of £42,000 been issued at 4| per cent., and* it could not have been placed lower, the cost to the citjr would have been jnst seven times the actual cost incurred. Therefore, it was good finance to take the £6000 from the general fund. That sum of £6000 had been repaid, lately, by the sale of the remaining debentures, and the sum would reduce the outstanding overdraft on 31st April by that amount. A WRONG SUGGESTION. There was no possible truth in the suggestion that any part of the abattoirs loan was used for any other purpose. I On enquiry to-day, he- found that the office exchanged the debentures without passing bankers' cheques (which, as a matter of practice, was perhaps inadvisable), "but the essence of the thing was the^same as if bankers' cheques had been given, and the £15,000 debentures handed over for it. The £15,000 raised for the abattoirs was credited to that kmn; and there it stood, subject to deductions in re&pect of outlay for the building and plant and land. He would like to say ■with regard to the overdraft, that no part of it was mad© up of expenditure in respect of ordinary current expenditure. Dr. Newman, in fairness to the old council, should have said — when he referred to the £27,000 overdraft on general account — that there was this sum of £6000 available as soon as the debentures are floated ; also that there were expenditures on recreation grounds and other expenditures, which had been made because they were unavoidable, and in anticipation of authority to raise loans to cover them being granted by the ratepayers. In addition to this, there was a sum of £18,000 paid for property in Willis-etreet, which was available as an asset, besides many other properties, which were detailed in the balance-sheet which was prepared in the begining of April, and Which set out the credits which were available, and which stood against the overdraft. In other words, the assets of tho corporation, acquired through this overdraft, and through savings out of the annual expenditure, form something greatly in excess of tho overdraft.