EX-COUNCILLOR BISS ON THE POSITION.

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

EX-COUNCILLOR BISS ON THE POSITION.

"A WONDERFUL DISCOVERY." "If Dr. Newman and other citizens of Wellington had taken the trouble to lead the published statements of the Oity Council during the last twelve months they would have seen that the whole position was explained over and oyer again," remarked ex Councillor Biss. The Mayor was adopting the attitude of having made a wonderful discovery, Mr. Biss added, whereas the position was one that must have been well known to every ratepayer who took the trouble to read the quarterly reports of the city's finances. When Mr. Bi&s first went into ths council he found that it was not the custom to submit to it periodical statements showing receipts and disbursements of loan money, but at that I lime the council instituted a system of issuing a quarterly statement. These statements were published in the news- | papers and criticised from time to time lat the council table. Every month, also, they were supplied with tramway and electric light receipts and expenditure statements, and it should have been known to everyone that the council was adding to its plant out of depreciation fund and profits ; using moneys which would have to be repaid from loans later on. The fact was plainly stated. When the loan proposals were put before the public the position again was clearly stated, but it was impossible to make the necessary refunds when the ratepayers refused to sanction the loan proposals. Personally, he had pointed out that tramway and electric light expenditures must expand as the service increased. If the additional plant had not been purchased, the businesses would have run a serious risk of a breakdown, and the whole of the services would have been dislocated for a month or two, until the new plant could bo imported. In such a case as that, severe criticism would have been indulged in, and justifiably. The new plant was absolutely necessary, to secure economical working, and the policy adopted by the council, in this respect, was-fche same

as all directors of large companies adopted ; they had to look ahead and anticipate means for adequately meeting public needs. "AN EASILY UNDERSTOOD POSITION. The present Mayor had referred to the overdraft as being something [henomenal, but it should be rei.i'jmb< rtd that tha rates never came in until the estimates had been passed and the rates for tha year struck. Let those who cavilled face the true position : if all expenditure of money was to be stopped, because of an extraordinary and easily understood position, every employee of the corporation would have needed to be dischaiged at the beginning of April, and all works stopped for three months — that was, until the rates came in. For years past the rule had been for the council to work on overdraft at the beginning of the financial year, in anticipation of the rates which came in during June and July. There was nothing wrong in this practice, and the present Mayor's pertui'bation was tumecessary. When the ratepayers refused to sanction the loans, the Finance Committee reviewed the position and stopped all further capital expenditure, except a few items which were absolutely necessary. Unfavourable markets for the raising of loans had been experienced in the last twelve months, and it was far better to work on overdraft, which could be repaid when money became cheaper, rather than raise a hurried loan, at a high rate of interest, which would be a burden to thccity for the next 25 years. A temporary overdraft at 5 per cent, was much better than a loan at 4^ per cent., plus 2 per cent, banker's commission, which would have had to have a currency of 25 years. Capital expenditure had had to be faced, for the reasons he had stated, and good value was received 'for the money, as it was all self -earning. Referring to the overdraft again, ex-Councillor Biss said it had been pointed out that it represented expenditure on street-widening account. The council had an opportunity of acquiring a. property in Willis-street on very favourable terms. The vendor accepted a large percentage of the purchase money in corporation debentures, at a low rate of interest. The Finance Committee had only been waiting for a favourpble opportunity for raising a* loan to repay this overdraft. It would have been a. tenousi mistake to have let this purchase fall through. In the meantime, the rents of the property moro than paid the interest on the cost, and this overdraft would be repaid out of a loan, and would in no way affect the rates. The matter of the abattoirs loan was left entirely to the Mayor, and the money market at that time was very unfavourable to the raising of loans. Therefore, on the question of arrangements, Mr. Biss could say nothing, but on the general question, it seemed to him that it would have been bad finance to raise £15,000 at a high rate of interest and then let it lie idle. At that time there was no prospect of the money being required for the purpose il was raised for, seeing that th,e abat-toh-s were hanging fire. The full explanation of the position would be given by the late Mayor, no doubt.