THE PROPOSED NEW BOROUGH LOAN.

Hawke's Bay Herald, Volume XXVII, Issue 9144, 30 August 1892, Page 3

THE PROPOSED NEW BOROUGH LOAN.

A public meeting of ratepayers wr.s held in the Borough Council Chambers last night, to discuss the proposal to raise a new loan of £35,000. The Mayor occupied the chair, moat of the councillors were present, and a fair number of ratepayers attended. Toe Mayor explained that) some twelve months ago the Council came to the conclusion that It was necessary, for tbe better financing of the borough, that a new loan should be raised. There was an overdraft and a mortgage on some of the borough property, nnd it was desirable that those lintilities should be cleared off, while it was atsolotely necessary that considerable works should be undertaken, such as an extension of tbe waterworks, water supply, and drainage, especially at the Spit. After going carefully into the question the Council came to (he conclusion that a loan of £35,000 was necessary. That would not, however, involve nriy higher rating, bnt tbo reverse. Slnre the £70,000 loan was exhausted the Council had had to undertake many permanent works oat of revenue, and if those work; were constructed out of loan, as they should be, tbe Council could carry on with a lower rate even after providing Interest on the newloan. He thought at least 2d in the£l less would Inve to be paid. The amount annually required for office expenditure, road maintenance, fire prevention, &c, was in round figures £5000. The revenue from rents, licenses, &c, was £3000. A rate of Od in the £1 would provide the other £2000 required. Tbe I present ordinary rate was 1b 3d in the J £1. If tbe proposed new loan were raised at 6 per cent the charge for interest would be £1750 ; if at 5J per cent, £1950. A rate of 6d in (be £1 woald realise £2000. Adding that to the General rate of 6d, and to the special rate of Is Id in the £1 to provide for the £70,000 loan, the total rates would be 2s Id in the £1, rs compared with 2j 3d now. Tbe preseut liabilities of the borough amounted to | between £18.000 and £19,000, so that after paying these off there would be some £16,000 left for new works, of which, however, £8000 hnd been, as it wcro, allocated for tbe purchase of the new waterworks plant and the extension of the works. lie did not think that the money could be raised at 5 per cent, but ho thongbt it might be obtained locally at 51. Mr Lirge advocated going on the London market and offering the loan at 0 per cent at par. Cr. Neal pointed out that it would lie cheaper to raise it at 5} per cent in the colony, as if the money were borrowed in Kngland the interest had to be sent Ilo'ue six weeks before it wes due, and exchange h»d to be paid. The Finance Committee had gone very fully into the whole matter, and their information from Eng land was that it would be almost impossible to float a loan of that description there at par. The Mayor pointed ont that the Napier Harbor Board's 5 per cent loan, which stood relatively higher than almost any other New Zealand local loan, was quoted at 95. The Council bad reason to believe that the Government Insurance Pepartment would advance the money at 5} per cent, and take the loan at par. There would be no expense whatever, while if the loan were floated in England tbo brokerapo and other charges would be very heavy. Mr Edwards thought that before the ratepayers were asked to sanction the raising of the money it should be alloca'ed to specified works and so "ear-marked." He referred to the swamp nuisance as a work which should be undertaken out of the proceeds of the loan. Cr. M'Vay explained at some length tho efforts the Council had taken to test the feeling of the English market. Mr Logan first endeavored to get a consolidated loan, nnder which the present 6 per cent debentures w onld have been converted into 5 per cents, but he was unsuccessful. Then a leading broker was consulted, and be reported unfavorably ou the likelihood of the new loan floating, and that was before colonial local loana bad come into f ncli disfavor as they bad recently done. Then Mr Sainsbnry went Home, and be wrote stating most distinctly, and acting on thoroughly reliable information, that ie was quite impossible to get anything like par for such a loau at 5 per cent. The Mayor, reterring to Mr Edwards' remarks, pointed out that the lagoon was the property of the Harbor Hoard. Tho Council could not enter upon that, but it had called upon the Harbor Board to abite the unlsance, and the resnlt was the diversion of the Tutaeknri river, which bad already done much good, and promised to do more. Cr. Neal pointed ont that the Council was so anxious to abolish tbe swamp nuisance that it had agreed to pay ouethlrd of the coat ot the river diversion. That might be taken as an earnest that the Council would not neglect the matter in the f'ltaro. Cr. Cohen reviewed the past action of the Council at some length. He agreed with Mr Edwards that the swamp nuisance should be grappled with. If it wr.re on private property the Council would compel the owners to abate it, even if the cost ruined them, and he did not see why a powerful public body should he differently treated. Mr Knowles spoke in favor of "earmarking" tho loan, and that Initiated n lengthy discussion. Finally Mr I. Din widdif, to bring matters to n point moved that the proposed loan be ngieec: to by those present, on the terms n> explained by the Mayor. Mr Liral seconded the motion, which was, oftei further discussion, carried unanimously. The meeting then adjourned.