Evening Post. THURSDAY, MAY 19, 1910.

Evening Post, Volume LXXIX, Issue 117, 19 May 1910, Page 6

Evening Post. THURSDAY, MAY 19, 1910.

MUNICIPAL FINANCE. — An additional statement of considerable length, but not a great amount of extra light, was contributed by the Mayor of Petone to the discussion of the borough's sinking funds in our columns yesterday. The Mayor denies some things that have never been affirmed, and also differs on one or two material points from his town clerk, but on the main point which exercised the mind of the council at its last meeting there is, unfortunately, no room for denial or difference of opinion of any kind. On each of the three loans in question, totalling £8000, the council was bound to pay one per cent per annum — we take the Mayor's figure, but the percentage must be rather higher — to create a sinking fund for the redemption of the loan, and it has allowed nearly three years to pass without paying a penny. The negligence of the Public Trust Office in allowing these arrears to accumulate may have been about equal to that of the borough council in failing to provide for the annual payments which it was under a legal obligation to make. But two blacks do not make a white, and the council is the only sufferer, since the omission of the demand at the proper time has not reduced its liability, and between three and four years' payments will now have to be provided out of one year's estimates. These facts are beyond dispute, but there is still some uncertainty as to the position of other loans. Tho loan of £7600, which was | recently raised for the purchase of a I recreation ground and for wharf and general improvements, is admitted to carry with it the obligation to create a sinking fund. It is also admitted that no payment has yet been made on this account, and the Mayor at first stated that this was because none had fallen j due, but in answer to a question from our representative he conceded that one half-yearly payment of interest and sinking f und might be in arrear. This single lapse would not be in itself a serious matter, but if the obligation has been ignored in framing the estimates, as in the other case, the omission is a serious one. After the recent stir it may be assumed that neither in the case of these nor of any other loans will ' the oversight be repeated. "• [ It is certainly time that the Petone j Borough Council looked carefully into j the matter and found out exactly where it stands. Even, after the stir at the "•meeting of the council on Monday, the Mayor is far from clear on some vital and speaks doubtfully and at sec-ond-hand where there ought to be no room at all for any uncertain sound. "The gasworks loans of £16,500 and £8500 involve no sinking fund — at least, so he is informed. "In reference to this," the Mayor explains, "I am taking the word of the Borough Solicitor, and if he is wrong the whole thing is wrong. Personally, I am not very clear about the matter, and will obtain fuller information." We have no doubt that the Borough Solicitor knows what he is talking about, but this airing of uncertainty on so plain and important a matter forty-eight hours after the debate in the council is not calculated to inspire confidence. The balance of the £52,000 of loan monpys which was then in question represents small loans, as to which the Mayor declared it to be "extremely doubtful whether the council could be called upon to provide sinking funds," but he was "not sufficiently conversant with the real facts of the case" to express a confident opinion. We trust that before the next meeting of the council he will have the whole matter at his fingers' ends, so that at that meeting he will be able to give a definite and authoritative lead. Nobody suggests that there is any ground for serious apprehension in the fact — if it be a fact, for here the Mayor differs from the town clerk— that loans totalling from £20,000 to £30,000 will fall due next year. The Mayor and the town clerk are, at any rate, agreed as to the remedy — viz., that the loans can be renewed. That remedy is fortunately likely to be as easy as the need for it will b« inevitable, but it is ior the Mayor and tha council to consider whether the indefinite renewals of tlwse obligations is really sound finance. Petone, of course, does not stand alone in the matter. There are scores of other boroughs in the same position, but we hope that Petone s trouble and the Premier's recent declaration in favour of sinking funds in connection with all of the Government's future loans may combine to establish sounder methods all round*