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Evening Star, Volume III, Issue 799, 27 November 1865, Page 2

We quite expect that the application of the City Council respecting the conversion of the L 35,000 loan into a grant will be severely contested in the Provincial Council. We understand that the majority of the country members will oppose it, but that the Government will support the request. There is one view of the question which we fancy has hitherto escaped general consideration, and that is, that the L 35,000 was advanced to the city of Dunedin, not out of general revenue, but out of the L 500,000 loan, the interest and sinking fund of which are contributed to pro rata by the inhabitants of the city. If the L 35,00 is the only portion of the half-million from which the citizens of Dunedin have derived any direct benefit—is to be re-charged as a loan to the city, it follows that the inhabitants of Dunedin will have to pay the interest and sinking fund twice over—that is to say, they first pay as contributors to the general burden of the half-million loan, and, in the second place, they have to pay interest and sinking fund on the L 35,000. As the interest and sinking fund of the L 500,000 loan are paid out of general revenue, it follows that the inhabitants of Dunedin, by reason of the proportion they bear to the whole population of the province, do in reality pay the greatest proportion of the whole loan. Surely it cannot be considered an unfair thing that the citizens should ask for a small share of the loan ? Besides, it should be remembered that this loan was originally proposed by the Government as a gi’ant, and it was only because it appeared likely that, unless the Town Board took it as a loan, they would not get it at all that the Government adopted that course. This is not a case of first asking for the loan and then begging for a remission of the debt. The advance ought to have been in the first instance a grant, and if the Council refuse now to carry out the original intention of the Government of the day when the debt was contracted, the city will be justified in absolutely refusing to pay the interest. It is true that the Government hold the right of impounding the rates as security, but the Government cannot levy rates, and the course the City Council should take would be to refuse to levy rates at all. We trust the Government will be staunch in supporting the application of the City Council. The request is a perfectly reasonable one, and ought not to be refused.