The Marlborough Express. PUBLISHED EVERY EVENING. WEDNESDAY, MARCH 18, 1908. THE GAS LOAN.

Marlborough Express, Volume XLII, Issue 65, 18 March 1908, Page 4

The Marlborough Express. PUBLISHED EVERY EVENING. WEDNESDAY, MARCH 18, 1908. THE GAS LOAN.

In considering the proposal to borrow for the purpose of improving the cpjidition: of the gasworks the main issues should be kept steadily in view. One of these is the absolute necessity for increased capital to put the works in order, arid make the extensions ,requjried to cope with the increasing business. It is clear that things eah'not remain as they are. On© has only to glance at Mr Kennedy's report, the salient features of which are reproduced on another page of this issue, to realise that it is impossible to continue the present unsatisfactory state, of affairs. Increased capital is needed for two purposes. One is. the removal of existing defects, and the other provision for the extension, of a growing business. Under the first head perhaps the least said the soonest mended. We have to pay for gross mismanagement in the past, and it is clear that the outlay now required for that purpose cannot be avoided. There is only one thing to do—pay, though the process may reasonably be expected to be accompanied by a considerable amount of grumbling.. The other aspect of the question is the need for capital to pay for extensions. This is a pleasurable feature of the business, and should be so regarded, i Every growing business ma!?es demands for additional capital to keep paca Avith requirements; and thio was the experience of the Blenheim gas business only last year, when a sum of brer £1000 was devoted to this purpose. , This amount, by the way, was made to appear as woridng expenditure, and a loss of nearly £500>vas thus shown; but it is clearly bad book-keeping to regard capital expenditure as a working expense. As Mr Kennedy points out tlie truef value of.the works is not r snown / andcr the present- system of keeping, the accounts, and few con--cerns could be said to pay if this system were general. The actual Vn&n on waH as 'follows: —Receipts £6bbo, expenses of working £3127 net profit £541. This profit, toSetner. with an additional sum of £474 (obtained presumably from the Councils general fund), making in all £1015, was expended on plant. Jt is clear that the actual difference between receipts and working; expenses disclosed a profit last year of nearly £600. It is equally clear that with the savings to be effected by adopting Mr Kennedy's suggestions, and the increased business to be gained by extending the mains, a greater profit will accrue in the future. It is to ensure this happy state of affairs that the loan is needed. It is proposed to borrow £3500, of which sum £1000 will be used to repay amounts expended out of the Qeneral Account, leaving £2500. as suggested by Mr Kennedy, for immediate necessities. This, of course, is cutting it fine, and makes no allowance for still further extensions as Blenheim continues to grow, but the profits of the concern may reasonably be expected to furnish capital for that purpose. These, as we have shown, are nearly £600 a year, and under the promised capable management of the future they may reasonably be expected to be more Mr Dcs Forges has shown that 'for the nrst half of the current year the profit, after providing £350 for interest oil loan account, was over A-Joy. Even at the present actual

earnings the ..suggested-loan >vp'uld: be a safe proposition. Interest and 1 sinking fund upon £3500 at, say, 0 < per O3nt, would amount to £210, still : leaving a balance of over £300 to the Rood. The additional interest .charge would, as Mr Kennedy says, be. a small sum compared with the advantages to be derived from the expenditure, the additional measure of safety secured, and the large increase in the producing power of the works There are, of course, objectors to a loan, as many ratepayers , have a deeply-^rooted antipathy to pledging the credit of the Borough ; for any purpose whatever. But if a « careful examination of the position i be made, it will ibe evident that no j improvement, no extension of busi- j ness, no means of increasing the output at a lower percentage of cost, in short'no method of lifting the con-; cern oirt of its present condition, can be devised' without money. This being so, how is it to be obtained? There are but" two, ways. One is the loan, the interest and sinking fund of which would be more than met by the profts of the business. This is the equitable mode of meeting the case. The other, the inequitable, is to levy a special gas rate upon all the ratepayers, and make consumers and non-consumera. alike find the money. The common-sense of the ratepayers will surely be equal to deciding between these two propositions. ''