Hawera County Council.

Opunake Times, Volume V, Issue 214, 22 September 1896, Page 2

Hawera County Council.

(Star.) GOVERNMENT LOANS TO LOCAL BODIES,

Councillor Macrae, pursuant to notice, moved, That the faot of the Government having seized the sinking fund in connection with the Government loans to local bodies makes it manifest that in the opinion of the Government it is not necessary to preserve a sinking fund for eventual repayment of money borrowed and that they be asked to relieve the ratepayers concerned from liability to pay the proportion of late supposed to be allotted to that objeot; that the ratepayers should only pay four per cent if one per oent is set aside for sinking fund; or, failing that, that a protest be entered against appropriation of the sinking fund, and that they should be urged to refund the amount already taken. It was not necessary for him to say much, for it was generally held that a wrong had been done to borrowers under Looal Loans Act, and it was incumbent on the Council to take notice of it as representatives of the ratepayers. The money paid by them was to repay the loan in twenty-six years, and the diversion of the sinking fund was an improper thing, for the ratepayers would have to contribute to the sinking fund during a period of twenty-six years, and at the end of that time have to pay again in common with the general body of taxpayers. He thought it an injustice which should not be allowed to pass unchallenged. While he thought in the circumstances it was reasonable to ask for abolition of the sinking fund he would prefer that the original arrangement be held to and the sinking funds left undisturbed. As to the reduction of the rate of interest he thought that should undoubtedly take place, for interest generally was lower now than it had been for years, and the Government should supply it at 4 per cent. Cr McLean seconded. Since the Government had seen fit to take this money it was evident they thought a sinking fund unnecessary, and if so the ratepayers should get the benefit of it.

Gr Stewart did not think isolated action would be of any use, but combined action shouid be taken by all local bodies.

Cr Macrae said he had intended that to follow.

The Chairman said there were two sides to the question. No doubt it was wrong to seize the sinking fund, but he would point out that there was none from 1886 to 1891 and that in 1892 the Government simply took away what they had given. As to the ratepayers, they only paid the sinking fund once, and if the Government, instead of using the sinking fund, had borrowed, the ratepayers would have had at once to pay their share of the interest on the borrowed money. As regarded tiie rate of interest he agreed th it it should be reduced. When the Loans to Local Bodies Act came into force it was known that the repayments would not be sufficient and it was suggested to raise it to 6 per cent, but the Government found the the difference. In fact, this Act took the place of the Roads and Bridges Construction Act under which subsidies were given to the local bodies, and the Government found the extra one or 1£ in place of the subsidy they used to give. Now, however, they were paying no more than the local bodies paid, so that really the Government gave no subsidy. It would therefore be reasonable to ask the Government to reduce the rate of interest to 4 per ceut. Cr Proudlock also agreed that the rate of interest should be reduced.

Cr Winks said the ratepayers borrowed the money on certain conditions and were only bound by those condition and he supposed the Government had a right to do what they liked with the money repaid them. As to interest, the Government should charge the ratepayers no more than they gave for it. Cr Scott endorsed what had fallen from Cr Macrae and considered that the seizure of the sinking fund should not be allowed to pass without protest. Cr Macrae did not think the Government had a right to do what they liked with the money beoause there was an understanding that part of it should be used to liquidate the loans and the conditions had not been maintained. The course followed was a discouragement to settlers who borrowed. The Chairman hoped this would not lead to party lines in the Council. To get party feeling into the Council would be a thing to be deplored, and result in much waste of time in useless discussion. Cr Macrae agreed. The Chairman added that it was going rather far to ask the Government to refund.

Cr Forsyth said that while he disagreed with the misappropriation of the sinking fund ho did not see what the Couucil had to do with the matter. He however thought they should ask for a lower rate of interest. Cr Stewart thought that the seizure of the sinking fund was a mere financial subterfuge and should be stopped if possible, but he did not want to enter into political matters in which he took but little interest.

After a little discussion, Cr Macrae adopted a suggestion by Cr Proadlock to alter his motion and amended it to read " That the Government be asked to make a reduction in the rate of interest, owing to the cheapness of money and that other County Councils be asked to co-operate." This was agreed to.