OVERDRAFTS BY PROVINCIAL GOVERNMENTS PROHIBITED

Marlborough Express, Volume IV, Issue 177, 29 May 1869, Page 4

OVERDRAFTS BY PROVINCIAL GOVERNMENTS PROHIBITED

Tin-: following circular was addressed to the various Banks in the Colony, by the Colonial Secretary, in March last: “ Colonial Secretary’s Office, Wellington. “Sir, —As there is some reason to believe that your bank may be applied to on behalf of some Provincial Executives for loans, either by way of overdrafts or otherwise, the Government deems it right that you should be informed that it is advised that advances made to Provincial Executives, either by way of overdraft or otherwise, to be repaid out of Provincial Revenues, are illegal, and that any Act or Ordinance of a Provincial Council purporting to appropriate money for the payment of any such overdraft or loan would be invalid. “The Legislature, as you are probably aware, in the last session of the General Assembly, declared in the Provincial Appropriation Validation Act, that loans by way of overdrafts were illegal, and certain Provincial Ordinances, which had been passed to appropriate money to repay such advances, were declared invalid until validated by the General Assembly, and a special authority was required to enable the Governor to assent to certain Provincial Bills passed for the same purpose. “The Legislature has also specially enacted that no further debts were to be contracted by provinces without its previous authority. There is, therefore, no ground for supposing that the General Assembly will validate any provincial bill passed for appropriating moneys to the payment of moneys advanced in defiance of the law. Under these circumstances, it will be the duty of the Government to advise his Excellency to disallow any Act or Ordinance passed by any Provincial Council appropriating money to the payment of any such loan or overdraft, and to withhold his assent from any such bill which may be reserved for his assent. “ I have further to inform you that should any officer in your bank receive any revenue of a province in payment of any money advanced by way of overdraft or loan to such province, without the authority of an Act of the General Assembly, the provisions of the Provincial Audit Act, ISGG, will be enforced. “ I have the honor to be, Sir, Your obedient servant, “(Signed) E. W. Stafford.”