NORTH-EAST VALLEY WATER LOAN.

Otago Daily Times, Issue 14447, 13 February 1909, Page 10

NORTH-EAST VALLEY WATER LOAN.

DEBENTURES TO GO TO LONDON, AN ARGUMENTATIVE COUNCIL. A special meeting of the North-East Valley Borough Council was held last evening, there being present the Mavor (Mr Isaac Green) and Crs Campbell, Harvey, Bolting, Howlison, Maeandrcw, Mowut, and Evans.

The sub-committee's report, as 'rend, showed that the bank, after considering the figures laid before it, which provided for the payment of 4£ per cent, interest'on £17,500, and for the liquidation of the loan by a sinking fund of 1 per cent, per annum, for the provision of which interest and Kinking fund an annually-recurring special rate of 9d in the pound was to be made on all rateable, properly within Ihe area to lie reticulated, had replied that there was no ohance of floating the loan in New Zealand in ihe present state of the nionoy market; that it itself would not advance the money on the hypothecation of the debentures; that the loan was too small in amount to bo thrown upon the open money market in London, but that the bank would, if its solicitor was satisfied with the security, write ils London branch and ascertain if it couid dispose of the debentures privately. This would mean a delay of about six weeks, and _the cost of the step would probably "comprise solicitor's fees (about £101, the cost of cabling (about £6), and the cost of selling tho debentures in T<ondon, which, if done by the bank, would be about I per cent., and if done by an underwriter about 2 per cent. .Finally, the bank was of opinion that if the security was to the satisfaction of the solicitor, the debentures could be sold ill london.

The report was formally adopted after brief discussion.

Cr Harvey then moved that the matter of the flotation of the loan be left in the hands of the Bank of New Zealand on the terms indicated in tho report. Cr Howlison seconded the motion.

Or Kvans said lie was going to oppose this motion. He did not think it was any good going on at all. It was certain, he thought, that the loan would never lloat out of Dunedin, as ho did not think the solicitor would think the security good enough to go to Loudon. He thought there had been a mistake from the start, Ho held that now the proper thing to do was to make out new proposals altogether. Unless there w-as another proposal which made provision for proper security, he <lid not think there was a chance of the loan l»ing floated. He thought thai, properly looked after, the loan could he floated in New Zealand. They should formulate new proposals and begin do novo. C'r Maeamlrow pointed out. that, (ho bank manager thought they could get money on the London market.

At ihis siage Cr Campbell rose to move that the council go into committee.

The Mayor refused to accept the proposal as an amendment on the ground that it had no connection with (he motion before the meeting, which had been discussing a definite c|iiestion.

Cr Campbell demurred to this ruling. C'r Evans joined in i-ho attack on the chair, and to a remark from him tho Mayor retorted: "You will allow mo to conduct the business in this council. - '

Cr Evans: Yes. sir, I will; but I will not allow you to conduct it in any way you choose without expressing my opinion. The Mayor: I will not be dictated to by anyone in tho council. To Cr Campbell (after asking the clerk to read the motion before the meeting for his information): Proceed to speak to Iho motion, or resume your seat and peruse the report from the sub-committee, and sl'cak afterwards.

Cr Campbell and Cr .Evans desired that the clerk should again read the report iivhich had already been read and quoted considerably), and alleged that for other councillors this would havo been done; but the Mayor remained firm, and Cr Campbell resumed his seat to read tho report before again speaking.

Cr Botfing said he intended to support the motion. The trouble was not in any way in regard to the security, but was duo entirely to the state of the money market. Ho thought some councillors seemed to ho throwing mud at the thing, and were more frightened of f,he borough's security than wore tho bankers. They (the council] wanted to get the scheme through if possible.

Cr Mowat could not, lie said, support the motion. He was scrvy they were losing time. He wa6 frightened the loan would not succeed.

The Major remarked that it was c big mistake to raise that bogey about the question of their security. None of the financial agents be had mot in Dunedin had in any way questioned iJieir security. The simple explanation was. that money was tight, and -there was no money in Dunedin to be advanced on their loan because, n.s a matter of fact, interest was now from .5 to 7 per cent. Now they had the opportunity of trying outside tho Dominion when be had not the slightest doubt that the loan would bo raised. If they could get it at I per cent, they should bo thankful. If any other scheme were brought forward if would lca.ve tho ratepayers in the same position for the next two years as they had bc;n in during the past two years. Unless thoy passed this motion they were not- doing what (here was a possibility of doing during their term of oHico.

Cr Campbell, having perused the report, again rose, and announced his intention of opposing the motion. In tho first place, he thought it would bo a great deal better if the council would go into com-mit-lee and consider the position.

This raking up of the old qucstiioji produced another unpleasant scene. Cr Camp-h-ell endeavoured to -press the Mayor to accept as an amendment—" That the council should go into committee," but on failing lo succeed in his endeavour fried to get the Mayor to explain his ruling. This tha Mayor did, saying definitely that, a.s a motion duly moved and seconded was before the meeting, he could not accept an amendment, apart from the subject. Ho (the Mayor) would be delighted to listen lo Cr Campbell's remarks on tho motion. He had come prepared for a "night out," and would give it lo them. '

Cr Campbell, accepting defeat on this question, continued arguing against the motion. Ho agreed with Cr Evans, and thought they should start again do novo. He thought- the security was not sufficient, and said thai the Tnicri Drainage Board had to pledge the rates for certain areas as sc'irilv for its ln«n.

The Mayor: So do we pledge ourselves for the area reticulated.

Cr Campbell: No, sir: all that wo have pledged ourselves for is the 1 per cent, sinking fund.

The Mayor: We are pledged for the area that is to be reticulated.

Cr Campbell: I say you are not, your Worship. All that you are pledged, as the security of the loan, is 1 per cent, sinking lund.

The Mayor: That is where we differ. What is the use of arguing? If the borough were short in interest, the bondholders would have the right of levying on that, particular portion.

Cr Campbell continued his speech in opposition, and commenced quoting at length with reference to some £5000 loan, of seme years ago, when only £1300 had been paid by the borough mi to the sinking fund commissioners.

Hero the Mayor remarked in an aside to the reporter, "Don't report this," which, Cr Campbell overhearing, took great exception to and delivered an exordium to tlic reporter, saying that he hoped and trusted he would know his position, and' not allow the Mayor to dictate to him what ho should or should not report. The Mayor: Resume your seat. Are you the Mayor or am I? Cr Campbell and Cr Evans together proclaimed that it was essential that the jress should bo impartial. Cr Campbell had previously been very desirous that proceedings should be in committee, when, of course, no report could lw taken.

The Mayor here made some emphatic statements. I • was not going to be dictated to. If Or Campbell proceeded like tilts lie would take extreme measures. Sonic councillors were tliere simply to raise ill feeling, to put a lot of rubbish in the paper, and damn the flotation of the loan. It did not come well froin anv councillor to raise these objections. The Mayor concluded: "You proceed to address the question, or 1 \vill call you to order again."

Cr Campbell proceeded. The proposal would not be damned there that night. It was Ax.ia.ai already. The money was not li:.„.'y to lie got on the terms they had o'Vrocl. The: councillors who put obstacles in the way were the ratepavcrs' friends. If these obstacles had been taken notice of tit the time they would have been in a better position than they were in. Cr Harvey, briefly replying in support of his motion, said he hod anticipated the opposition that had been shown that night because it had been displayed every time there had been any attempt at all at progress. There was more opposition in tho council than tl ore would be out of it. TV motion that the debentures be en--kusted to tho Bank of Now Zealand, for.

private sale in London was then put, and was carried, ilio voting being: For tho motion—Ors Harvey, Jiottinsr, Howlison, and Macandrcw; against—Cm Campbell, Evans, and Jlowat.

The council then resolved itself into eoniinittce to consider the proposed deed between tho Corporation of Dimcdin an<l the borougii with regard to water reticulation.