Daily Circulation, 1565. The Oamaru Mail. MONDAY, DECEMBER 19, 1892.

Oamaru Mail, Volume XVII, Issue 5462, 19 December 1892, Page 2

Daily Circulation, 1565. The Oamaru Mail. MONDAY, DECEMBER 19, 1892.

As we hinted would be found to be the case, the demand that has been made by the bondholders turns out to be one for the consolidation of the whole of the borough loans into one loan, with a general pooling of the whole of the securities that the Council have to offer, for the equal benefit of all holders of debentures. This is made clear by a correction received by the Council of the imperfect cable message read by the Mayor at Thursday night's meeting. The message from Mr Low, the Council's agent in tho matter, in its perfect form reads as follows : unless all loans were amalgamated. I have arranged for amalgamation in terms of the issue °of L 175,000 five per cent, bonds for principal and expenses, under a fresh statute, granting a fresh charge over all property and all sources of revenue, including present rates consolidated (say 4s 6d). The payment of the one per cent, arrears is deferrod as desired. Government rrlust consent. I await your reply."' The position is now made clear, and things in connection with the conversion operations wear an encouraging appearance. But all is not yet plain sailing, and a couple of obstacles have to be surmounted before it can be said that the business has been brought to a satisfactory conclusion. The total amount represented by the seven per cent, debentures that were supposed to be affected by the proposed conversion is L 145.000 ; but it will be observed that the agreement arrived at by the bondholders is contingent upon the amalgamation of the whole of the debenture debts of the borough in one new issue of debentures at five per cent, to the amount of L 175,000. The additional L 30.000 asked to be included in the operation is made up of LSOOO of a loan at five per cent, for general purposes, held by the Government; the gas loan of L9BOO at five per cent. ; the waterworks extension loan of L 14.000 ; and the sum of LI2OO to cover the expenses of the operation. No one can dispute the advantages that would be derived from complete unification of the whole borough indebtedness, with the abolition of a multiplicity of separate rates, levied for specific purposes, and the substitution of a single rate to cover all the requirements of the borough. Such a change would produce a most desirable simplification of the management of the finances of the borough, and reduce very materially the amount of clerical work at present entailed. But two things have to be done before this desirable end can be attained. In the first place, the sanction has to be obtained of the holders of debentures other than the seven per cents, at first only contemplated in the proposal. So far as the Government are concerned no difficulty need be anticipated, for the position of the debentures held by them will not be affected detrimentally; but the holders of the gas debentures and the six per cents, may not view the change with favor. However, we can only hope that they will take a reasonable view of the matter, and assent to an operation that would put the affairs of the borough upon a sound footing and make their own position thoroughly sqcure. Then, the increase of the borough debenture debt from L 173,800 to Ll7 ;_ >, 000 would be equivalent to raising a further loan of LI2OO, and would necessitate going through the process prescribed by law to be taken prior to the issue of a new loan. We cannot for a moment imagine that, in view of the magnitude of the advantages to be derived from the operation, the ratepayers would refuse to assent to a small addition to the borough indebtedness, if such a comparatively trifling increase as LI2OO were necessary to secure the conversion of the borough debt at a permanently reduced rate of interest. It is possible to devise a means of avoiding even that small increase of debt; but consideration of that point may be reserved until all else has been made smooth in the path that leads to the consolidation ancl conversion of the borough loans.