A CITY WORKS LOAN.

Otago Daily Times, Issue 15708, 10 March 1913, Page 4

A CITY WORKS LOAN.

The letter which we publish this morning from Dr Gordon Macdonaid shows either that he has not carefully read the proposal for raising a loan for expenditure on public works in the city or else that he has not correctly apprehended the scheme. Ho says that the cost of the loan will be saddled upon the users of the commodities supplied by the Corporation trading departments, and that the price, of three commodities will in consequence be raised to an unfair level. This statement is certainly not justified by the terras of the proposal. It is the case, of course, that it is contemplated by the Public Works Committee that a definite plan shall be devised under which the trading departments shall be systematically placed under contribution to the general municipal account in relief of rates, the amount so contributed being regarded, in the words of those responsible for the loan proposals, "as'a quid pro quo for the 'backing' that the ratepayer is called upon to give as security for the money spent on these undertakings." It may be, as was remarked in these columns in our previous reference to the loan project, that it is arguable whether this policy should bo adopted. The > fact, however, that the practice of transferring sums out of the profits of the trading departments to tho municipal account is already recognised and nas been followed for a good many years may be said to throw on the opponents of the policy the onus of proving its unsoundness. But it

does not appear, on the calculations that have been submitted to the City Council, that the adoption of the loan project will throw any serious obligations on tho trading departments during the six years over which it is expected the expenditure of the borrowed money will be spread. On ■the contrary. Tho average amount annually transferred from the trading departments during the past six years was £7762. But, when regard, is had to the amount of ordinary revenue' that mil be " released " owing to the expenditure of loan moneys upon objects which are now provided for out of the general municipal funds, it is anticipated by the Public works Committee that the average amount that will annually have to be transferred from the trading concerns to the general account during the years of the loan expenditure will not be quite £5500 per annum. It is certainly true that after the sixth year, when the loan expenditure will have ceased, a heavieT call upon the trading departments is contemplated. The committee has arrived at the conclusion that a total of £12,762 will then be required from these sources, and it has tentatively assessed the annual contributions as follows:—Water Department, '£6000; Gas Department, £900; Tramways Department, £2400; Electric Light and Power Department, £3370. Upon this basis, very little more will be asked from the trading departments than was obtained from them a year ago, when three of them contributed £12,000 to the generai fund. It is, on tho face of it, a commendable feature of the committee's scheme that it is proposed to fix the annual contribution of the'departments at a fixed rate—namely, 15s per cent, of the loan capital in each case, and when the growth of the city and tho increase in the business of the departments are taken into consideration it should not be beyond their power to provide an annual payment at this rate.