THE OTAGO HARBOR BOARD.

Evening Star, Issue 8526, 27 May 1891, Page 4

THE OTAGO HARBOR BOARD.

(Fbom Oob London Corbespondent.] The 'Financial Times' devoted two long articles last week to the affairs of the Otago Harbor Board. The firßt concerned itself ohiefly with sternly crushing the 'Otago Daily Times,' which appears with greater public spirit than wisdom to have espoused the cause of this ricketty corporation, and boldly endeavored to prove that wickedprejudice underlay the unkind London criticisms. I do not propose to bore you with this leader here 5 suffice it to say the London paper seems so far to have got the best of the controversy. The second • Financial Times' artiole, however, is more important. It deals with the Otago Harbor Board's accounts for 1890, and makes some startling allegations, Here are the vital portions : "The Board's statements of assets and liabilities are an even more interesting study than its revenue accounts. In 1886 the assets inoluded plant scheduled as worth L 152.366, and in 1887 this valuation was inoreased to L 203.432. In subsequent years the value of the plant disappears entirely from the statement. The reason for this may possibly be found by an examination of the detailed, inventory for 1886, which is the last published, An important item is the hopper dredge, valued at L 35,509. Is it, we wonder, the fact that this is under offer for sale at L 25.000 without finding a purchaser? Has. the steamer Balclutha, valued at LI ,027, since been sold for LSO? Have the harbor office, boat shed, and land at Port Chalmers, against which a value of L 2.200 was placed, realised the handsome amount of L 5, and is it the fact that the site never was the property of the Board ? We do not wish to weary our readers by queries of this nature, which we have good grounds for putting, and which we could prolong indefinitely, but the bondholders will naturally want to know what comes of the proceeds of these portions of the Board's assets. We have entirely failed to disoover any specific relative entries, and we believe we are right in stating that the money is carried to revenue account disguised under the heading of • Incidentals.' In view of the information on the Bubject which we possess, and part of which we have given above, we have not the slightest hesitation in saying that if the valuation of plant, which has been dropped by the Board from its statement of assets and liabilities, were to be replaced by a competent and impartial valuer the comparison with the last published inventory would startle the bondholders, unless they were absolutely blind to their own interests, would lead them to adopt our suggestion of having their interests looked after on the spot. "The history of the dispute with the Auditor-General of New Zealand is an interesting one. The Acts under which the last two loans of the Board were floated provided that LIOO.OOO of the first and L 65.000 of the second should he expended for the benefit of the Lower Harbor aDd on the improvement of the bar at Otago Head, It should be explained here that in the opinion of many of those who are best qualified to judge, the Upper Harbor was never worth the money spent upon it. The Dunodin people wero jealous of Port Chalmers, and insisted upon having their own harbor, with the financial result to which we are now drawing attention. Be that as it may, the Upper Harbor has a majority upon the Boavd, and they ignored the Act to which we have drawn attention, and spent the money on the harbor as a whole. It is true that an account was made up purporting to show the expenditure of L 165.000 on the Lower Harbor, but the charges for this purpose include L 32.000 for interest on that proportion of the two loans ! This extraordinary charge was made prior to the time the Board and the AuditorGeneral made a fresh start with a clean slate, though it is obvious that it would be as much justified in one year as in another. The result is thai; the Lower Harbor has been defrauded of at least L 32.000, which the Legislature enacted should be spent upon i\ and no amount of tinkering accounts and 4 agreeing upon' balances between the Board and the auditor will alter this fact. Strenuous efforts are being made at present to sell the hopper dredge, to which we have already referred, the ostensible object being to apply the proceeds to the works urgently required in the Lower Harbor. It is obvious that unless money is forthcoming from some source of this kind the works re quired at whetever part must be neglected, as the Board has not a penny to spare. As a matter of fact, the Lower Harbor is not the only part where works are required. To take one example, many of the wharves atDunedin are in very bad repair, the piles being almost useless from the action of a worm- Teredo navalis. We have now, we think, said enough to give home investors an idea of the financial condition of this Board. The revenue is falling off, or at best is only being maintained by raising rates to the maxima authorised; further capital expenditure is required, and there is no money in hand for the purpose. At the risk of further wounding the susceptibilities of partisan local journals, we venture to suggest that the possibility of default is not so remote as thoy would have us believe. We sincerely hope it may never take place, but the position is at least such that holders of the earlier issues of bonds will act prudently in maintaining their prior lien on the Board's revenue rather than in accepting the offer to convert into Consolidated Bonds, which are a deoiiedly inferior security."