The Southland Times. PUBLISHED DAILY. Luceo Non Uro. WEDNESDAY, JUNE 18.

Southland Times, Issue 3430, 18 June 1879, Page 2

The Southland Times. PUBLISHED DAILY. Luceo Non Uro. WEDNESDAY, JUNE 18.

New Zealand lias been facetiously termed the " Great Lone (loan) Land," the play upon the title of the interesting work by Captain, Butler' having reference to the colony's indebtedness, and truth to tell not without reason. - Tbe colony is a good borrower generally as well as collectively, for there is scarcely a corporation within its boundaries that is not indebted in a greater or lesser degree, on its own 'particular account,' to some outside creditor or another. If the country -were less favored than it is in the matter of resources alarm might be excited at the free application made to the world's money market, but as it Js, the assets 1 are of such unquestionable character, and the prospects, both present and future, are so exceedingly bright, that the extent of the indebtedness is not calculated to excite the faintest apprehension as to results. Public creditors may rest assured in the conviction of the safety of both principal and interest, and also may prepare -themselves for further demands in accordance with the just system of extending to posterity the liability for that in which it will directly benefit. The ordinary growth of progression is not satisfactory -in this go-ahead age; the forcing process has to be applied to meet large and increasing requirements, and the process, which is viewed doubtingly by only the near-sighted and timorous, is recognised by the far-seeing and resolute as the one that pays the best, and the one, above all others, the most suitable to the rapid expansion of New Zealand growth. Whilst, however, we admit the expediency of freely testing the forbearance of money lenders, we yet recognise the different characteristics of borrowing, as distinctive only in the quality qf the security offered. Having the whole colony to pledge, the general Government goes into the money market with confidence that corporate bodies under y it cannot hope to emulate, their assurance of success being exactly ;in. accordance with their position and the security they may have at command. In every case that security is strictly local, the central Government having disclaimed the slightest responsibility, and, such being the case, it behoves all corporate borrowing bodies to make their securities as attractive as is possible. So far, the limit of borrowing has not been defined by Act of Parliament. Under the old provincial system, there was, a definition. in> the case of municipalities, t>ut the new Municipal Act places that limit in the decision of the ratepayers. If their voice so wills it, the borrowing may be to any extent the compl acehce of lenders will counten ance, and as muaicipaV bodies; are they.principal sources of local borrowing, it may, in view of the readiness displayed by all and sundry to raise money, be legitimately questioned whether the voice of the k people is the safest guide. There should, we think, be a controlling influence i^ the background, its powers to be defined by- Act of Parliament, in relation to the limit of borrowing corporate , bodies; might go to. This might easily be accomplished by officially ascertaining the ' financial Condition of every corporation year, -by year, , and , so defining its borrowing powers. For instance, . the Invercargill;;, of to-day is very different to the Invercargill of four years, ago, its borrowing Capacity then being infinitely, inferior to what it is now, and similar consideration applies to other municipalities. This would be fair to both borrower and lender, the first thereby finding legitimate warrant in incurring indebtedness, the second receiving assurance of the soundness of '• the investment. There, is another ' phase of the local borrowing question that is to* be considered, viz., the means adopted for the repayment of loans by the establishment of sinking funds. Now, the latter are in a great measure controlled by trustees or commissioners, who may be somebody or nobody, according to- the caprice of those who appoint them. In the case of municipalities under old ordinances the Government appoints, but under .the Colonists Act, the appointment is vested' in the Council. Harbor Boards have also similar power conferred upon them by the Endowment and Borrowing Act. Whatever may be set aside as a sinking ' fund is paid to these trustees, and by them invested, with the consent and sanction of, the Council. Restrictions are greater in 'the case of Harbor -Boards, for the manner of invest--1 ing. the sinking fund is very clearly specified by the . Act, of which clause 18 says : — " It shall be the duty of the said commissioners, from time to time, to invest all'moneys so paid them," . . . "in,-the purchase of bonds, bills, and debentures issued by the Government ot New Zealand, or by the Government of any par 6of the British dominions, or of bonds or debentures issued; /under this" Act.". Here the Act stipulates for certain descriptions* of investment generally considered as the safest. ' Both the' Municipal ACct and the Harbor Board Act point to the Public Trustee as one competent to be entrusted with the great responsibility appertaining to the control • of sinking funds. This brings us to the gist of our argument. -^Why should not the Public Trustee, be., the centre of the sinking funds of the colony, his duties in connection with them carefully, defined by statute, and, by the same power, in him only shall they be vested-. •We take it that this would be an immense improvement upon'tKe existing slip-shotl arrangement. Public creditors would .be thereby assured that a very important responsibility in connection with repayments was entrusted to an official of position and influence about whom there was something tangible, and' moreover, ng a fur-

ther recommendation, the responsibility would be in' a measure shared oy<jjtf|e Central Government, which, and tfiiß fact may not be generally known, is obligated to make good any defalcations on the part of the Public Trustee. Such an arrangement as that which we suggest would not influence the manner of investing sinking funds. Such moneys 'might-* still be invested" in any. kind of security determined upon by the corporate bodies interested. "The Bluff Harbor Board Has "set an excellent example to -other local bodies -in„ appointing the Public Trustee as the commissioner of its sinking land, but still there should be nothing ' optional in- such a course, for L where the latter might , be dictated by j the good sense of bne'body, half a dozen others might fail to catch the idea.' We think the question is one that .should be taken up next session. The- alteration would but involve the passing of short amendment Acts in ' connection ' with those statutes endowing corporate bodies with borrowing powers.