The Timaru Herald. FRIDAY, DEOEMBIR 23, 1887.

Timaru Herald, Volume XLV, Issue 4121, 23 December 1887, Page 2

The Timaru Herald. FRIDAY, DEOEMBIR 23, 1887.

Unless some decisive aeps aro taken during the next session of Parliament to avert such a catastrophe, it ib quite possible that the New Plymouth Harbom 1 Board may, towads the close of , 1888, find itself m a psition m which it will be unable to injefc its engagements, including inter (Ha payment of interest on borrowed nuney. This is 1 not a random opinion, bit is based on tbo report of a -Parlianentary Committee which during thepresent session has made an exhaustim inquiry into the financial position of the board. 1 The Committee says "that the New Plymouth Harbour loard will havo great difficulty m meeting the interest charges after the next half-yearly payment falls due (Ist Kay, 1888), and that unless some change is made us regards the land admiiistration it will bo unable to do so after Ist November next. (2) That the difficulty arose nltnost entirely from (be large extent to which land has been lisposed of during the laßt two or thro years upon the i deferred payment md perpetual lease systeuis, to the consequent diminution of rush sales, frcm the proceeds of which the board are by law entitled to receive 25 per cert. (3) That the board ia unublo to rase any larger autn by way of rate tlan at present, tho full amount of nto authoritied by law,

viz., m the £on the ocpital value, being now imposed. (4) That tbis rate (equal at present to about la 3d m the annual valne) added to other local rates, presses with great severity on the settlers, and is calculated seriously to retard settlement. The Committee are of opinion that the difficulty might be to some extent decreased by raising the landing charges, but that after this is done the Board would still be unable to provide for its annual charges, notwithstanding the heavy rate at present imposed upon the lands of the district. The Committee consider that it may be possible to devise 6ome measure of relief without entailing any additional burdens on the Colony, and they recommend that the report and the evidence attached thereto be referred to the Government with a view to proposals to that end being submitted to Parliament." We have not had the advantage of seeing the evidence on which the report was based, but there is no reason for doubting that the Committee had ample grounds for arriving at its conclusion with regard to the financial position of the board. The latter would have had no inclination or opportunity for concealment or falsification, and the former would if possible have avoided a report the ■outcome of which might impose a fnrther burden on the colony. It is true the Committee suggests that some relief would be afforded by raising the landing charges at the port, but it is admitted that sufficient funds could not be procured m that way. It is also true that the Committee vaguely reports that it may be possible to find the money without adding to the burdens of the colony, but there does not appear to have been any attempt innde to formulate such a scheme. That work is left to the Government and the legislature, and as yet the business has not been taken m hand. It may be asked why should the colony trouble itself about the matter. The engagements of the New Plymouth Harbour Bo%rd, including the promise to pay a certain interest on loans, are not the engagements of the Government or the people of New Zealand, and if the board were to make default, the question would be between the debtor and the creditors. Primarily that of course is the aspect, and there is nothing m the Bhape of a guarantee. But nevertheless it ia the duty of the Government and the legislature, acting m the interests of the general community, to insist on local governing bodies fulfilling their engagements m the matter of payment of interest on borrowed money. The colony may not be the debtor, but default on the part of a local governing body must m every case be more or less damaging to the public credit. If two or three of those bodies were to make default m payment of interest on debentures held m London the colony would speedily get a thorougly bad name, and the effect would be felt m a great many ways very much to the disadvantage of the community. It was that consideration which raised such a storm of indignation all over New Zealand when, not many months ago, an Oamaru paper suggested something which sounded very much like local repudiation. In the case of the New Plymouth Harbour Board the Committee alludes to the burden which the ratepayers already have to bear, and to the fact that the legal limit of rating has already been reached. If this were a jj»raHol Caen to that of Oamaru we should have no hesitation m saying tbat, although the present burden may be heavy, it ought to be increased before the colony was called on to shave it. No doubt the general verdict would be that as the New Plymouth people insisted on having their harbour constructed they should be compelled to pay for it out of their own pockets. Bat, as it happens, there are special circumstances m connection with the unfortunate financial position of the board which ongbt fairly to be taken into account when devising a scheme under which faith with the creditor may be maintained. One of the sources of the board's revenue is a proportion (25 per cent) of the Government land sales of the district, a right to which issecured bystatute. That law was passed before the system of perpetual leases and deferred payment for Crown lands was thought of. Cash sales were the order of the day, and the calculations of the board as to its ability to pay interest through a term of years, until the revenue from the harbour, coupled with rates, should suffice to meet local services and payment of interest on loan, were based on the average yield of those sales. The operation of the new land system, which was pushed to extremes by the late Government, had the effect of almost destroying the board's revenue from that source. We hesitate to say that the Government or the legislature was guilty of a breach of faith towards the New Plymouth Harbour Board when the new land system was introduced into the Taranaki district. But it is a fact that both Government and legislalaturo had been consenting parties to the payment of the proportion of the land sales under the old system, and were well aware that loan engagements had been entered into on the strength of the concession, the value of which (on the bauis of cash sales) had not been over-estimated by the board. The scheme for the construction of the New Plymouth Harbour has found bitter opponents m various parts of New Zealand, including Canterbury. It is probable that when the subject comes on for discussion next year (as it ninet if due provision for the payment of interest on loan is to bo made) those opponents will display much readinesß to compel the settlera of Taranaki to continue to discharge their liabilities m connection with harbour expenditure. But they may forget that the difficulties of the board have arisen not through its own default, but as a direct consequence of new lund legislation which could not have been foreseen, and which took no account of the perfectly legitimate engagements into which the board hud entered on the strength of the old system.