BOROUGH’S DEBT

Evening Star, Issue 21169, 1 August 1932, Page 1

BOROUGH’S DEBT

DOUBLE THE RATES SECURITY

£13,000 OWING TO GOVERNMENT

(Tek United Pi;ess Association.]

AVELLINGTON, July 30. In bis written judgment in the Thames debenture-holders’ petitions for the appointment of a receiver, oral judgment in which he had already pronounced, His Honour Mr Justice Ostler says:—

“ It is unnecessary to give the detailed history of the loans which have been raised, but it may jbe stated that in 1921 the unimproved value of the rateable land in the borough was over £283,000, and the total debt of the borough was about £40,000, or about £l4 to every £IOO of the unimproved value. To-day the rateable value of tho unimproved land has sunk to about £107,000, but the total amount of the loans raised by the borough and secured on the rates payable in respect of unimproved value is no less a sum than £250,000, and in addition the Thames Harbour Board has raised £60,000, secured by borough rate, so that there is a total debt of £2OO lor every £IOO worth of unimproved value.” Referring to the steadily increasing amount of loans and the steadily decreasing value of the security* offered, for them, His Honour points out that since 1924 there have been no issues of loans taken up by the public except a small loan of £575 by the A.M.P. Society and one of £12,000 by A. and G. Price Ltd., both in 1925. AVith those exceptions all the money borrowed by the borough since 1924 has been lent by Government departments, chiefly by the Public Trustee, who has invested no less than £130,000 out of the common fund in Thames securities. It seems inevitable that the common fund will suffer a heavy loss in this investment. , The opinion held by His Honour was that if a receiver were appointed, and subsequently tho Governor-General in Council appointed a commissioner, the latthr appointment would immediately render tho receiver powerless as he could take no step to enforce the payment of interest. It would be futile to appoint a receiver if his powers were liable to be destroyed immediately in that way.