The Daily News. THURSDAY, NOVEMBER 18, 1920. BOROUGH LOAN WORKS.

Taranaki Daily News, 18 November 1920, Page 4

The Daily News. THURSDAY, NOVEMBER 18, 1920. BOROUGH LOAN WORKS.

The outlook of the New Plymouth Borough Council as regards the raising of money for loan, works is not encouraging, especially in view of the recently authorised loan lor further equipping the present tramway service, and the prospective further loan required for the -hydro-electric scheme. The hardening of the money market has naturally caused investors to look for higher rates of interest, and that is probably tiie reason why very little capital is finding its way into the borough coffers as subscriptions for debentures. The security the borough is able to offer is quite as good as that which the Government can give investors, and as the rate of interest is the same, the only question for investors to decide is whether to help the Government or the Borough Council, or, in the alternative, to decide how much they will lend to each, ft was foreseen when the Government decided to raise its loans locally that public bodies requiring loan money were bound to be adversely affected, but there being practically no other course open, it became necessary to bow 1o the inevitable and trust, the public to do their utmost to provide the required capital. According to the statement made by the borough general manager in his recent monthly report, there will be available sufficient money to keep the hydroelectric extension works going for the next six or eight months, and possibly more according to progress, but the Dositioß of the loan

for street works, water and sewer extensions is such that progress can only be made with the works in the ratio of the receipt of money from the sale of debentures —that is to say, a hand to mouth policy must be pursued relative to , this undertaking. It has been found by experience that capital is more readily subscribed to Loans that are revenue producing than for those which are unproductive. In reality no sufficient reason exists for this distinction, as the security consists of a special rate in each case, and it is the security that should be the dominant, factor. From a purely business viewpoint it would be sound policy to concentrate on the revenue-pro-ducing works, but the needs of the ratepayers arid residents as regards streets, water, and sewers cannot' be ignored. It is quite certain the town cannot progress without the expenditure of capital in the shape of loans, and if the capital has to be raised locally, it becomes necessary to devise means for attracting the required subscriptions to enable the works to be carried out. The maximum rate of interest is fixed by law, and as the rate is appreciably above the interest offered by the Post Office Savings Bank, it should attract small investors as well as large, though in the case of the former it might, be necessary to frame a scheme that would prove a sufficient inducement. There appears to be no indications of a more favorable financial position arriving in the near future, so that the position must be i'aeed as it exists at the present time. This means proceeding with the most urgent of the works authorised, and deferring the others until money required therefor is available. At the same time, everyone interested in the progress of the town should be animated with a due sense of personal obligation to do his or her share, according to financial ability, towards furnishing the necessary funds for the required improvements. In this way two good objects would be accomplished—the town would be provided with modern facilities, aud those who purchased debentures would be making excellent use of their savings, aud would receive a fair return for their investment. The Council might well consider the advisableness of deferring the unproductive works until after the money required for the hydro-elec-tric extension has been raised, and it is probable, if this course were adopted, the whole of the debentures in respect of that loan would be taken up. This plan would entail a certain amount of hardship on those who are anxiously awaiting metalled streets, water, and sewers, but in these times sacrifices cannot be avoided. The only way to obtain all the requirements is to provide the loan money, and if all helped in this the problem would solve itself.