BOROUGH LOANS

Gisborne Times, Volume LV, Issue 6204, 8 October 1921, Page 5

BOROUGH LOANS

PEEL STREET AND HAITI

BRIDGES

VERY SATISFACTORY NEGOTIA- ' • TIONS . Consequent upon a.further visit of the Mayor, Mr G. Wildish, to Wellington, and the representations made by him to the responsible authorities, the arrangements in connection with the Borough loans for the construction of the Peel street and Kaiti bridges have now been finalised, and the technical difficulties in connection therewith overcome. °

The principal difficulty with which the Borough Council was' confronted was the raising of a loan of £IOOO from the A.M.P. Society to- keep the Gladstone-Road bridge loan alive, negotiations in connection with this having been held up pending a judicial decision regarding the authority of Jhe Minister of Finance to prescribe both 1 tile rate of interest and the term of local bodies loans. In conversation with a Times representative, Mr Wildish, who returned yesterday morning, stated that this question had now’been definitely settled, and the CounciFs position in regard to the loan still further assured by anticipated amending legislation to be brought down; during the present session of Parliament. The legal position is explained in the following letter which has, been received by the Council from Messrs Chapman, Skerrett, Tripp, and Blair: — "We have to advise you that the questions under, section 11 of the Fi- ' -nance Act, 1921, have now been decided. The decision is such that the difficulties which we indicated to you no longer prevent the loan* to the Council being proceeded with. We / will therefore now proceed to prepare the necessary documents and forward same to you/’ The Mayor pointed out that this decision had been awaited with some anxiety as the authority for the raising of . the 'Gladstone Road bridge loan would have lapsed on October 14. The qase in which the points under the question had been determined was the consideration of an originating summons which had been brought before the Acting-Chief Justice, Mr Sim, a.t the Wellington Supreme Court, :in regard to questions in respect of tho Wanganui Borough Council finances. Tiie question for the determination of the Court was whether the Council had power, under . the Local Bodies Loans Act of 1913 and its amendments, and under the Finance Act of 1921, to borrow from the A.M.P. Society, £120,000 for ten years at 7 per cent, the Council having previously executed debentures in respect of the loans for a period of ten years hearing interest a.t 6 per cent., and hypothecated the same pending the raising of the loans to the Bank of New Zealand to secure advances. After hearing legal argument on the questions, His Honor held that, as the Council had hypothecated the debentures, the Governor-General-in-Council could not exercise the powers conferred by Section 11 of the Finance Act 1921. Those powers authorised him to prescribe both the rate of interest and the term, which might be done by special orders, and he could also, by a subsequent order, alter both the rate of interest and the term. Prior to this decision being given, however, Mr Wildish interviewed tho A.M.P. Society’s solicitor, the Hon. J. G- Coates, Minister of Public Works; the Hon. Downie Stewart, Minister of Internal Affairs; and Colonel Campbell, Secretary to the Treasury, and, as a result -of giving the matter careful and full consideration, another means of overcoming the difficulty had been devised. It was explained that it had been intended, during the session, to so amend the Local Bodies Loans Act as to make the period for which the authority’to raise a loan would be valid, five years instead of two as previously. It was ultimately decided that, when this amendment was brought down it should he made retrospective, so that loans now authorised, instead of lapsing after two years, will remain valid for a further three years. In the event of this amendment coming into force, the Kaiti bridge loan; will therefore not lapse until October 1924, instead of this month,.as would otherwise have been the case. Commenting upon the satisfactory termination of these negotiations, Mr Wildish -said that the position had, for some time, looked pretty black, and the Council had, in his opinion, been extremely fortunate indeed to have the matter so satisfactorily settled. The success he attributed to the determined manner in which the Council had 6tuck to '“its task, and the continued representations which had been made to the authorities. The position with regard tq the loans was that the Council hao. now to get the necessary debentures signed, and then lift the money.