LOAN MONEY

Evening Post, Volume LXXXIV, Issue 88, 10 October 1912, Page 7

LOAN MONEY

GOVERNMENT & LOCAL BODIES PARLIAMENTARY ENQUIRY QUESTION OF POLITICAL INFLUENCE. To-day the Public Account* Committee continued its enquiry into the allocation of loan* to local bodies under the State Guaranteed Advances Bill, Mr. J. B. Hine (Chairman) presided. Sir Joseph Ward, referring to » report of yesterday's proceedings in one of the morning papers, explained that what he did say was that he would not care to be a Minister who took the responsibility of advancing loans without a board. Under the old Local Bodies Loans Act he had refused scored of loans. Mr. J. \V. Poynton. Superintendent of the Department, produced returns giving details of loans granted under the old Loan to Local Bodies Act. Further examined by Sir Joseph Ward, witness saw that under the Loans to Local Bodies Act the whole of the principal would have> to be repaid, The witness' was further questioned by Sir Joseph Ward as to the objects for which various loans to borough* and other bodies had been advanced, and in each case it was shown that the works for which the loans were raised were for the purposes which were within the scope of the policy of the board, such m waterworks, drainage, streets, and such like developments. In answer to a remark by the Hon. J. Allen, Sir Joseph Ward said he had heard most extraordinary statements made as to the exercise of political putposes in regard to the granting of these loans, and he wanted the details to be given in evidence. INTERESTING FIGURES. Witness gave details, adding that the loan to Timaru worked out at' about £10 a head, and for Pukekohe at about £18 a head. During the period of twenty-five years that the Loans to Local Bodies Act was in operation £1.300,000 was lent to local bodies, and during the two years the State Guaranteed Advances Act had been in. operation loans authorised to local bodies totalled £665,430. During the same period of twenty-five years borough couhcils received £732,021, and the amount they received under the new Act was £797,590, the final approvals being £1,026> 740. For road boards, under the old Act £615.674 was loaned, and under the new Act £211,300 was approved and £148,230 paid. " Sir Joseph Ward said he proposed to Sive evidence on oath and say that from is own knowledge during the last twenty years local oodies had been unable to obtain sufficient money for their requirements. Mr. Poynton went on to say that th« cost of administration of the Depart' ment w&e 9Ad pet every £100 of the capital employed. THE DEMAND FOR AN ENQUIRY. Witness was examined by the Hon. J. Allen an to the objects of the board in sending the letter in which the enquiry was asked for. He said there was a general charge that money had been squandered during election year. He could not point to any particular part of the newspaper reports showing that definite charges were made. Mi 1 . Massey had, however, declared that money was squandered during election years; Mr. Hine had said it was diabolical, and the Minister himself had mentioned specific dates on which loans were supposed to have been improperly granted. The Hon. J. Allen : Were they before the board when it passed the resolution T Mr." Poynton: I am not sure. The Minister : Then what were the grounds on which you passed the resolution ? Mr, Poynton said the board had before it the Press reports and hie own recollection of what had occurred. The other members of the board were very excited about it, and agreed with him that the sooner an enquiry was made the better. He did not consider that the resolution was a reflection on the Minister, and certainly did not intend it to be taken as such. It merely wished for an enquiry to remove the impression undoubtedly existing in the House. The board had no intention of reflecting on any member of the House. Witness, further questioned by the Hon. J. Allen, said the Minister mad* -no charge in the House against the board, but he thought that what he said implied that the board had been influenced by political motives. The board could not grant a loan without the approval of the Minister, but the recommendation for loans was not sent bo the Minister by the board, and the impression existed that the loan money had been lent for the purpose ' of influencing the election, and that ms 14 very grave reflection on the board. No loan bad yet been refuted by the Minister. The witness was closely examined by the Minister regarding the granting of the loan of £87,635 to the Remuera Rood Board near the time of the General Election of 1911, ami also with regard to other loans granted to boroughs. He went on to Bay that in the first year <tf the department's existence the board rained £400,uuu and lent about £10,000. The remainder was uninvested. The board had power to invest it temporarily, but no opportunity of doing so. The Minister : why did you borrow H? Mr. Poynton: If we hadn't taken it from the Post Office we would not hav# been able to get it when we wanted it. The next year the board borrowed £575,000, and the following year £512,000. That brought them to 19th August, 1912. For the year 1912.13 the board had borrowed £175,000. The department had only power to borrow a mijlion for the year, but could not raise the amount of the million not borrowed the previous year. The Minister f Have you got the amount finally approved up to August, The witness; £2,116,195. The Minister: And paid over! Witness: £1,484,700. There had been very few approvals since the present Minister came' into office. It would b« necessary to raise about £300,000 this year to pay the amounts coming due. For next year the commitments wet» £250,000, and for the following year about £100,000. None of that money was raised. The Post Office had told the department verbally that it could get as much as it wanted. The department had not arranged for any loan since November last for loans at 34 per cent. Some of the commitments wens for loans at 3£ per cent. ; the other* were at 3| per cent. ( He would furnish details of the commitments at 3| per cent, and 3| per cent. The Post Office, he considered, would have to providt money at 3J per cent.; which had been provisionally approved at 3i per cent., and where the local body had entered into engagements on the basis of 3£ per cent, he considered they ought to be granted at that rate. The Minister: Was not the arrangement with the Post Office that 3£ pel cent, was to be paid on loans granted? Mr. Poynton j I cannot Bay without reference to the file. NO LOANS FOR "LUXURIES." Further questioned by the Minister, Mr. Poynton said the board had rrfuxed

certain gas loans where the money was Required to purchase gasworks. It had granted loans for acetylene and original gasworks. Generally it refused to loan money for what it regarded as "luxuries." Some gas loans were grauted•and some were refused ; it depended on 'Ahe amount of money the board bad at 3ts disposal.' * [During the course of the examination 3Nlr. Ha-nan twice complained of the manlier in which the Minister was examining the witness, and remarked that^ it savoured more of the style of a Police .Court prosecution tKan an enquiry before a Parliamentary Committee.] . In reply to other questions by the Minister, witness said he at first refused the proposal of a loan of £78,000 for the iWairoa Harbour Board, but later, when -he had . further arguments in favour of the .proposal, put before him by a local the board approved of it. "He thought that was a more necessary &york than gas or electric light. £25,000 jwas. approved for the Hokitika, Harbour >Board. That was for the construction i>f training walls seaward. -The loan of £20.000 to the Motueka Harbour Board ,was for the purpose of forming a harbour -near the Moutere Lagoon. It was at first declined, in December, 1910; the question was reopened in ■ the same month, in consequence of fresh representations made, and on reconsideration it »was granted. He could not remember Jhe reasom given. « At 1 p.m. the committee adjourned ( fcntil 10.30 p.m. on Tuesday next.