LOAN MONEYS

Nelson Evening Mail, Volume XLVII, Issue XLVII, 7 November 1912, Page 5

LOAN MONEYS

REPORT TO PflßLiiMEfiT / ADVANCES BOAR© METHODS ' 4 . criticised. CHANGE IN THE PERSONNEL RECOMMENDED. fUnixed Press Association.) WELLINGTON, Nov 6 ~ The Public Acocunts Committee's -re--' port on loans to local bodies was readin the House of Representatives last night as follows: — • s - - "The Public Accounts ' Committee, which was directed to.inquire fully into all the loans paid, or applied for,' or provisionally or finally approved, for local authorities under the New Zealand State guaranteed Advances Act since : its*,-inr ception, and-to report on the losses made (if any) since the Act came into tion, commitments and available means and, unexhausted loan authorities -H!v..ati 31st March, 1912,• apd 16th SeptemHeiv 191*2; also on the letter of the superintendent of the New Zealand' ; Stat©. Guaranteed Advances Department, ''of 30th September, 1912, to.the Minister, of Finance, has the honour to report its follows : —(1) The loss sustained by the local authorities- branch-of thei'-NeW.jZei-land State Guaranteed Advances Department since its inception up to- August 21st, 1912. was between £22,000 and 1 . £23,000, arid was 'incurred owing,- (a)_ to the- Board's difficulty- in finding "ini- , mediate investments for the funds -at the. credit of the loans to . local authorities accounts ; and (b) -to the remisdon';ofr.los per cent', allowed to thesDepartment .being insufficient to cover the expenses aifd losses of interest, whilst the moneys remained uninvested. (2) The commitments on" 31st March, 1912. were £820,320, and the commitments on 16th September. 1912, , were £651,310; ''•"'(•3) The available means, and. unexhausted loan authorities at 31st March v y1912, were as follows : Credits in bank, 643, unexhausted loan anthprities £778,000. (4) The available . means'\.and ; .v"BJiexhausted ■ loa'nv authorities at 16th-:Sep-tember; 1912, . were- as :■ Credit? at bank £27,550, debts £30,000,. debits exceeding credits by .£2450; unexhausted loan authorities £825,000. : >i-■£.'?'■■ ■ . The Committee's, finding; was :•' 'ln., regard' to the .'superintendent's letter, written on behalf of the Adyancen-.'Board, alleging' that .statements '-were., madi->m thfe °Hbuse of Representatives-, on ,-2ath. Septfemben,l9l2y to; the that- loans had l>een granted-bythe" Boayd; to local - 'authorities under; political iunuencej and with a view" to. influencing . the .general election: of: -last 'December. . -ivas isubmitted substantiating intendent's written-statement, and; . the , Committee consider that members o the Poard -were m: acceptm? the headlines in the press reports as - suf- v ficient grounds for 'writing to: ter in charge of the Advances Department in the terms* used in the let,t«iv ~ The ' : Committee's . . recommendation ' was * ''TKe evidence has led the Committee to:the conclusion that.insufficient'Control'was exercised in administering loans tc- local authorities, especially-m committing the Department ttoge years ahead—an action which the Committee is advised was, contrary ,to law, Your Committee therefore .strongly; _■ recommend a change in the personnel . of ■tlie 'Advances Bo*rd. ; Hine,Chairman'" A MINORITY AMENmiEKT...--' DEFEATED BY 11 VOTESi v' Mr. Hanan moved as tc, the'.'Public Accounts Committees, ie;P°Th' a rt the' findings , and. tions in the .Committee's out ! with: a -view of inserting words. -These iire'.to the «ftect that-the evidence taken by the ComimUee and the records of the Department exaimin«dJ>y .it. conclusively .prove-r(l) that'.the.Matemenits in the Board's resolutions .that ;no .political or other influence was -at any time used to influence the Board-was true- (2)' that the (members of -the. Boar,« were justified: in', asking tor an mmuty into! tlie. grave. Reflections on tliew and' administration .made. in ,<ttie House andUhe Press <>f the Dominion ..that money .was, lent for'the purpose cf influencing. the : general election, in lyy. The inquiVy . had, completely exonerate the Boai'd from r stibie^,rta,Qr moved by: political influence m the discharge.; of .its (3) Ithat no discrimination on,-political- grounds been- made in ilie granting or. of a loan to a-local body »n electmal distrfct; '(4)-. that -no losses-had be<*h §US« 'taini'sd J through', - want. .of security WW* . t'he ''.State.: Guaranteed- ,-Advances AcU • Losses aimbunting ..to .£23,00P,, cui":r«d,tbeing dti® (a) ; tb the Board sdi tficuity in, .finding aiximediate an vestment for funds at credit,. (b) to. the- remission, of 10 per. cent, laltowed ,;to the Department being' insufficient-to_ coveir. expenses and.':loss of interest whilst inonevS madhed uninvested ; '(5) the-16sses, refer.r cd to in, clause. 4 were a trifle.. cCmpaieU •>vith those made under ithe old loans to •local 'bodies: system'; .(6) that/the-commits ments .made for -paymepts of lnstalnieatss ex.tend ing pver; a' period; of years wero in accordance with-'tihe;regulations the ActJ The 'Crown Law Office having now advised that such grants .were illegal the.'Act'.shbuld. ibe' a%red, to-psrmat o£ instalments of advances heing Trade, as i'n the 'past ; ' (7) that, had.- the Ppst Office fulfilled the promise last to lend\. Government ; £l 5 500,000, there 'wo.uld 'have been more ; than '. sufficient to imeet all engagements;: co'inimendations —(IV., Now' that - moneys may ; not be' ' obtairiaible ; from Post Oifice the Act should be alt&xed'. to make the interest payable to local,, bodies the' same as that ; at . which it is; raised moneys' aie'payable;to\ local ■bodies, 'plus a. (reasonable' amount ,for "cost's of. ' adirin;stration: (2)- Preference shpuld;. bo, Riven! to local bodies' whose' -financial position, and difficulty .of. carrying; oa their works, .entitle them to; preferential treatment, and the Act should be aifiended in ;the. dii-ection of classifying ;locaJ. 'authorities accordingly. t > Mr. Hanan, apealcing- to the airiendmerit, 'said if the Contmittee had-desired they should have. specifically sta'ted that there 'had been nti political ib connection witih 'the ciperations. of v tKe Advances Board: The re,port ought also to have stated that there had ,beeh ,no losses 'through the lending operations of ,the ; Botifrd. • : . . Mr. Isitt said the report, was—absolutely ;the outconre, of party d'iffer^ree,... The House divided, on. Mr. Hanon's amendment, which was lost by 39 votes to 28. . COMMITTEE'S REPORT ADOPTEp. 1 ; WELLINGTON, This Day... In the House.after, 2 a.m. the vdisoussion on the State Guaranteed Advances Amendment Bill was continued. ; On the motion for the.: second,,reading of the Bill, Sir Joseph Ward said, that 75 per cent of the members, who had voted on 'Mr H.inan's amendment had ••not j read the evidence, taken, before .the Committee. They -were condmning; him unheard. The responsible heads ;of departments had, given-evidence that, nopolitical influence had been exercised in repird to 4 local bodies: \ Mr. Allen said again that the. Board would be acting illegally in comitting the country to loans two or three years ahead. Mr Russell said that the 'Minister should protect departmental officers. He wanted to know which member of thft

Board was to be removed according to the resolution passed by the House. After further discussion Mr Myers appealed to the Minister to consider the purport of the report. The carrying of it must mean the losing of their positions" by some members of the Board. Mr R. Smith moved that the question at-'issue be referred to a judge before effect was given to the Committee's recommendations. Mr Fisher contended that the purport of , the report was''to get rid of the Board, not to embarrass any civil ser-> vant. Mr Allen said that he had never im-, agined or suggested that any political influence had been used by any member of the Board, but he did consider it was in "the interest of the country that the administration of the Department should be changed. At 4.30 a.m. Mr Massey rose and said that the Committee could have brought down no other report. He recognised that the Chairman of the Board was a zealous officer. The only intention of the report was to replace two members of the.Board by two business men. Mr Smith's amendment was lost on a division by 37 to 26. A division was taken at 7.30 a.m. on the Committee's report, which was adopted bv 37 to 26. The House then went into committee on the State Guaranteed Advances Bill