The Daily News. WEDNESDAY, MARCH 2, 1921. BOROUGH LOANS PROBLEM.

Taranaki Daily News, 2 March 1921, Page 4

The Daily News. WEDNESDAY, MARCH 2, 1921. BOROUGH LOANS PROBLEM.

The failure by the New Plymouth Borough Council to induce the Minister of Finance (Mr. Massey) to sanction an advance in the rate of interest on the Electrical Extension and' Tramway's loans authorised by the ratepayers, is certainly not due either to luck of perseverance or failure to put the salient points of the case, together with the serious consequences involved by inability to raise the urgently required money, fully and frankly before the Minister. When Mr. Ma'ssey informed the deputation from the Council that “the highest rate of interest which is being authorised at the present moment” was five and three-quarters per cent., there is no reason to doubt that the statement, in the strict interpretation of the actual words “present moment,” conveyed an irrefutable truth. At the same time neither the deputation nor the public can be blamed if they construed the position as indicating a settled policy and determination, rather than a cautiously worded assertion that was purposely couched in diplomatic language and meant exactly what it said. The only /eason for stressing this incident is that the Auckland Harbor Board and the Wanganui Borough Council have both been granted the concession which has been refused to the New Plymouth Council. The power of assent and refusal has been vested in the Minister of Finance, and the assumption is that the exercise of that power shall not be arbitrary, but governed by the merits of each particular application. The reasons which induced Mr. Ma'ssey to assent in the two former cases may be perfectly sound and justifiable, but that only makes his refusal of New Plymouth’s request the more incomprehensible in the light of the urgency of the works for which the money is required and in face of the warning that inability to raise the money at less than six per cent, would impose on. the Government the responsibility for a breakdown in the hydro-electric system, which, in the opinion of the Council’s expert advisers, must occur unless stand-by plant be provided, as well as the enormous losses that would ensue ihrough important industries such as freezing works being seriously crippled through electrical power not being forthcoming. Without in any way reflecting unfavorably on Wanganui*s desperate position, it seems that the old-establish- ‘ ed principles- of giving help An those who*

help themselves and favoring prevention rather than cure, are no longer recognised when the merits of cases are reviewed. If so, a premium is offered to maladministration, and the exercise of foresight in

order 10 prevent inevitable calamity is penalised. It is inconceivable that such a policy can be ventured upon by any Ministry, especially at a time when economic conditions are at such high tension as is now the case, and where industrial interests of great magnitude are perilously involved. Were the whole of the facts concerning New Plymouth’s application to the Minister reviewed by any independent tribunal they must carry certain conviction that the merits are so obvious as to justify compliance with the request that has been macle. Mr. Massey has taken up the position that he will refuse to grant the authority to raise the rate of interest to six per cent, unless the increase is specially authorised 'by the ratepayers. As Minister, of Finance it is his duty to be thoroughly posted up in all matters affecting the money market, and, though he has given expression to a sincere hope that the existing financial stringency in that market will not continue, he must be well aware there are no indications at present of a downward trend. Meanwhile the borough’s position with regard to the need of loan money is immediate, and urgently so, for the works and equipment required for preventing a breakdown are already in hand—the works having been in progress for over fifteen months, and machinery being expected shortly, so that if the necessary money for meeting payments is not forthcoming the Council and the ratepayers will suffer heavy financial loss, while works that have already cost £60,000 must be idle and unproductive, through no fault of the Council, but through the stringency of the money market and the refusal of the Government to sanction the lowest market rate of interest at which money can be obtained. Apparently the only solution is to obtain the ratepayers’ sanction to borrow at six per cent., but before so doing it is proposed to ascertain definitely whether the Minister will abide by the decision of the poll. Under the circumstances the Minister should not hesitate to give a favorable reply, and there need be no aqxiety as to tjie result of the appeal to the ratepayers, nor

should any further time be lost in putting an end. to a position of affairs over which no controversy Should have arisen.

PROMOTING PROVINCIAL INTERESTS The discussion which took place at the meeting of the Taranaki Progress League recently relative to the policy of amalgamating with the Central Progress League, at Wellington, opened up a question on which much argument can be based, for and against. Theoretically, the principle of mutual co-operation is one that is generally accepted as a means of acquiring strength, but there must exist unity of aim and purpose if the strength thus acquired is to be utilised beneficially. Where there is a real community of interest, such as should exist between all the towns in a province, co-operation should be a valuable factor in promoting general progress, but it is conceivable that in the case of adjacent provinces, while there might be some matters on which they could join hands in a common cause, there would be others on which diversity of interests and rivalry would not onlyprevent co-operative effort, but might be harmful. As between Auckland, Wellington, and Taranaki, differences of aim exist on several matters, added to which is the open jealousy between file two large cities, so that Taranaki, by joining the Wellington League, would, as Mr. J. B. Richards aptly stated, simply be a “hair in the dog’s tail,” to be wagged whichever way Wellington chose. If there is to be a co-operation it must be actual and thorough, free from protests and expressions of disapproval, and as that is unlikely to be the case as regards the three provinces, there would seem to be no justification for amalgamation. The Progress Leagues in each province were formed for furthering definite Objects to secure needs essential to their respective welfare, and, therefore, have a distinctive character. Whenever the aims of one or more ar e identical they can be made the occasion for mutual effort, otherwise each must work out its own destiny as best it can. By preserving a separate identity each League has a free hand either to assist or oppose one or both of the others. This would seem to be a better method than having a nominal unity and falling out over conflicting interests, besides the loss of prestige which would follow if Taranaki sunk her identity under the cloak of Wellington.

At the annual meeting of the N.Z. Refigerating Company in Christchurch last week, the chairman, Mr. H. A. Knight, took occasion to emphasise the extraordin?)y burden which is being thrown on joint stock companies by the present method of collecting income tax. “1 he position, - ’ he said, “has been further accentuated since we last met by the unexpected increase in the rates of taxation. The tax lias now grown to a rate which practically places the Government in the position of a full partner with preferential claims on the profits, without, however, any corresponding responsibility for the * losses. It will be apparent to shareholders what a handicap is / imposed on industrial enterprise when I inform you that the company’s income tax and local rates taken together absorb practically one-half of the income earned during the financial year. To put it in another way, practically only 50 per cent, of the income of any large enterprise is now available as a fund from which the capital employed can draw its return. It is hoped that the Government will realise that such a crushing burden must ,if long continued, stifle all enterprise, and that it will afford substantial relief as soon as it finds itself in a position to do so. It is difficult to see how any progress can be made, or real prosperty maintained un-