RELIEF WORKS

Evening Post, Volume CXVI, Issue 25, 29 July 1933, Page 12

RELIEF WORKS

AUCKLAND LOAN SCHEME

"BUREAUCRATIC CONTROL"

POLL MUST BE TAKEN

(By Telegraph.—Press Association.)

AUCKLAND, July 28.

The Local Government Loans Board has refused to permit the Auckland City Council to proceed with the loan proposals for its programme of relief works without first taking a poll of the ratepayers, and in giving this qualified sanction to the council's scheme it has reduced tho total sum that may be borrowed from £133,700 to £119,000.

It was the intention of the council to carry out relief works under tho Local Authorities Empowering (Belief of Unemployed) Act, 192G, and it was hoped to obtain authority to proceed before the Act expires next Monday, The original application by the council for sanction of the loan, under the special unemployment legislation which dispenses with the usual poll of ratepayers, was not granted by the Loans Board on the grounds that the proposals were too comprehensive and that no money could be borrowed under that legislation after July 31, 1933. The board was of the opinion that a poll should be held in the ordinary way.

Having an assurance that the money could be obtained in the event of the Loans Board agreeing to the council's proposal, the council renewed its application, and yesterday the Mayor (Mr. G. W. Hutchison) was in Wellington in consultation with, members of the board.

"I believe, but I may be wrong, that if the Local Government Loans Board had been certain that-we could not complete the formalities in connection with our proposed loan of £133,700, it may have been approved, but the moment the board found all arrangements had been completed the loan was turned down," said Mr. Hutchison at a special meeting of the council today, when the loan proposals were discussed. "To my mind it is a classical example of bureaucratic control," said Mr. Hutchison, ''particularly when you come to remember the constitution of the board." * "MOST ANOMALOUS POSITION." In order that no time should be lost over the formalities, said the Mayor, the city solicitor (Mr. Stanton) had accompanied him to "Wellington, and all arrangements had been made in order that the loan might be approved under the special legislation which would expire on July 31. The Loans Board was informed that the money required was available, and that the business could be brought to finality before the expiry date of the legislation. The Secretary of the Treasury (Mr. A. D. Park) was the chairman of the board. In that position he did not want anybody else to go on the market when the Government required money, said Mr. Hutchii son. Of,the five members of the board three werey departmental officers and two were, outsiders. It would therefore be seen that Government departments had control as far as decisions were concerned. The board's decision revealed a most anomalous position in that the major portion of the works—stormwater drainage in the city and the Mount Hobson reservoir—were the subject of an arrangement made last December "with the Unemployment Board. The secretary of the Unemployment Board sat as a member of the Loans Board, and was therefore a party to the decision making it impossible to carry out the arrangement made by his own employers. . x The Mayor said he felt convinced that instructions had come from the Finance Minister, and expressed the opinion that tho board had exceeded its functions in not granting the loan. Special legislation had been passed to help the unemployment position,, and all local bodies should be able to avail themselves of the opportunity. As long as the Act remained in force it was not the duty of the Loans Board to say that the Auckland City Council, or any other local body, should not be allowed to proceed under the special statute. THE RATES OF INTEREST.. In connection with the part of tho loan sanctioned subject to a poll, the board had made a condition that the I( rate of interest was not to exceed 4 per cent., but a proviso had been added that if the council found it impossible to raise money at that Tate application could be- made later to.the board to increase it to 4£ per cent.', provided the loan was raised under the instalment repayment principle. "I informed the board that money was not available at 4 per cent.," said Mr. Hutchison. "In view of that I have no doubt that the Loans Board will extend to us the 'privilege of rais* ing- the money at the extra quarter per cent, when it is found that \ho money cannot bo raised at tho interest specified." The Mayor moved that the council should proceed to take a poll to raise £116,000, the term,to be thirty years, tho loan to be repayable,, either by an equal aggregate annual or half-yearly instalments of principal and interest over the term of the loan, or at the expiration of the term, with provision for a sinking fund of not less than 1 per cent, per annum, and the rate of interest to be not more than 4J per cent, per annum, and security to be a special rate of 4-5 din the &T The Mayor criticised the board's anxiety that ratepayers should be eonsuited. Protest after protest had been made against the board's decisions in imposing rates of 3 per cent, for sinking funds, ho said. Mr. Coates had recently stated that the Loans Board was in close co-operation with tho Government in regard to interest rates. That bore out what he had said in regard to the Loans Board. t The resolution was carried, and also a. further resolution protesting against the Loans Board's refusal of the loan and appealing to the ratepayers to vote for the loan when it is placed before them.