COUNTY LOANS

Northern Advocate, 19 December 1919, Page 4

COUNTY LOANS

.THE TREASURER'S REPORT,

At the meeting of the Whangarei

County Council io-day the treasurer

submitted the following report on the

position of loans for the county:—

Manaia Loan £9000: Arrangements have been definitely concluded with the Advances Office to lift this loan as follows:—£3000 in March 1920, and £000(1 in the spring of 1920, and that, by so doing will in no way interfere with any fresh applications that may be submitted by this council after the end of the current financial year. Steven's Road £500: Final application and all papers in connection therewith submitted to Advances Office 2nd iast. for approval. Hamilton's Road £500: Final application and all papers in connection with same submitted to Advances Office 6th hist, for approval. Whareora-Hora, Hora Road £4500: Final application together with all papers submitted to Advances Office December 1. As a preliminary application for this loan was agreed to by the Advances Office prior to 31st March last it is fully anticipated that the final approval heroin will be accepted by the Advances Office. Mangakahia Loan £26,000: All formalities have been completed. Prospectus issued and sale of debentures placed before the. public. Advertised Wellington, Christchurch, Dunedin, Napier and Auckland. So far, no response.

Mangapni-Caves Road £2000: Poll carried. (One-fifth of a vote to spare.) Special rate being levied to-day. When gazetted, all formalities will be completed.

Hikurangi-Riponui Road £1600: All formalities completed.

Hikurangi No. 2 Loan £6000: Poll taken 17th inst. '

Otonga Loan £20,000: Poll being taken 19th January, 3920. PLACING OP LOANS. The following have been submitted and accepted by the Advances Office up lo the 31st March, 1920:— £ Manaia 9000 Stevens 500 Hamiltons 500 Whareora-Hora Hora .. 4500 Total £14,500 Date of lifting these loans can, without affecting in any way whatever, further proposals which may be submitted on Ist April next, be arrayed for any date up to November, 1920.

On the Ist of April next it is suggested that the following proposals be submitted as complete parcels:— £ Riponui-Hikurangi Road IHOu Hikurangi No. 2 Loan (if carried) 6000 Mangapai-Caves Road"".. 2000 Total £9600 The limit allowed by the present enactment being £10,000 in any one year.

Although it is advisable and right where possible that, loans should be taken into consideration in order of sanction by the ratepayers, more particularly so, as the rate of interest on loans placed with the Advances Office is 4_ per cent, as compared with 5J per cent, elsewhere (if secured). It is pointed out that the Advances Office will not entertain a proposal which "exceeds the limitation imposed by the Act. Even supposing the Advances Office would entertain < a proposal for an amount exceeding the £10,000 limit, it would be obviously unworkable to break up a loan, placing part with the Advances Office and part to public subscription (if offering). Further, it is provided that all loans shall be paid over by the Advances Office within twelve months from date of approval thereof.

For these reasons the suggestions in paragraph "b" hereof is submitted as the only course, until such time as the Local Bodies Loans Act is amended. Applications have been submitted, but without any success to the Public Trust Office, Auckland Savißgs Bank, South British InKurance, New Zealand Insurance, A.M.P., and several private sources. The usual reply being either, that money is not available or that with the high rate of income tax, an investment at 5J per cent, would not be at all profitable.

In view of such prevailing conditions the position has been pointed out to the Prime Minister asking, owing to the great difficulty in securing any loan monies, that the Government undertake to obtain a return from local bodies of the total loans carried, but unplaced, nnd endeavour to float same on the London or other sources at a rate of interest not exceeding 5 per cent.

The matter was also placed before the Hon, J. G. Coates, at Houto, by the county chairman on the 9th inst., when it was shown to the Minister that in view of the position local bodies were up against, it was the duty of the State to see that either the rate of interest was sufficiently steadied to enable local bodies to favourably compete in the open market, or increase the maximum rate of interest which may be offered by local bodies to 6 per cent.

Failing either of these proposals, then it is the duty of the Government to take in hand and float the total of local body requirements in loans, on London or other sources. That it was decidedly wrong that local bodies should be placed in the position they at present found themselves in, and that small loans for roading development should be hawked rtjnnd at limited rate of interest imposed by statute and where there was not the slightest chance of success for the reason that the local money market has been exhausted and disturbed by the issue of war bonds free of income tax, and left to continue in such a state when the income tax exemption was withdrawn. Cabinet has promised to investigate the position at its first meeting.—H. C. Hemphill, county treasurer.