MUNICIPAL LEASES.

Wanganui Chronicle, Volume LXXVI, Issue 17789, 11 February 1920, Page 6

MUNICIPAL LEASES.

(To the Editor.) Sir.—Cr. Burnett’s letter in your Friday’s issue calls for reply. It says, in effect. that the interests of the Borough should always be paramount, and that the ratepayers should not be penalised by unsound tenures. So far we stand on common ground. But very few people will support Cr. Burnett in the means he asks us to adopt to attain these ends. Cr. Burnett suggests that we build houses on residential sites, and give very short leases of the land contiguous to, or likely to become, business areas. Private enterprise can usually be credited, with a fair amount of horse sense where its pocket is concerned, and for many years it has decreed that the building of houses for others to live in is poor policy. I am unaware of the existance of any municipal concern run with such financial success as to warrant the belief that the Council would succeed in a field long since abandoned by the shrewd investor. To -deal with the second argument, I would say that the giving of leases on business areas, actual or potential, is one for individual consideration. If a section may be required for the extension of an existing municipal undertaking, or for one for which a real need exists, by all means conserve it. If not, lease it on the most remunerative tenure—the Glasgow lease. The right of resumption could still be retained. I previously asserted that the Glasgow lease was by far the more profitable of the existing tenures, and held that the increased rentals therefrom would provide a fund out of which the Borough could easily meet any future claims for compensation. Cr. Burnett carefully avoids this issue. Instead, he quotas a group ol* Glasgow leases where the average rental is only £2 13s 6d a year. This statement leads only to one conclusion, that if the sections are worth more, why did the Council not place on them a higher upset rental ? Why pass the alleged mistakes of the Council on to the Glasgow lease? Cr Burnett’s answer to the argument that the short-dated leases create slums is a naive one. He says that we can find freehold properties just as bad as the old hospital leaseholds. Possibly we could find a few such isolated places, but we certainly would not find a group to even suggest comparison with the old hospital aiea. As for the sanitary inspector condemning these places, let him begin his work on the freeholds quoted by Cr. Burnett. The inspector could certainly exercise more power over the private owner than he could over a public body, and if he ever tried to use his authority with his employers, the Borough Council, he would simply be asking for the sack. In regard to the gum plantation proposals, my comment proceeded on Cr | Burnett’s first statement that these sec- ! tions would be under Glasgow lease. He i now says that the Borough would have built the houses, and indicates that the proposition would have been a bad one. Exactly. Renting houses to others never was good policy. But even so, £lOOO to £2OOO an acre land does not mean more than £2OO tc. £350 a section, and many workers are content to pay rent on much heavier ground values than these to dodge tram fares and suburban isolation. Cr. Burnett seems to be obsessed with I the future needs of. the Borough as a trading corporation. I can only wish that he and his colleagues would express similar concern as to whether our pre- | sent municipal ventures are run on sound lines. Our Borough balancesheet is, in the form required by official regulation, a weird complication. Why not call in an expert acountant to submit a critical report on our finances and trading concerns, to open accounts in accordance with sound commercial practise, and present the Jesuits annually io the ratepayers in an understandable form 9 Every limited liability company is required by law to make clear distinctions between capital and income, between profit and loss, and has to submit the results to its shareholders in an annual balance-sheet. Why should our municipal ventures not be tested on the same lines The ratepayers’ property is held in pawn against the success of these concerns, so surely we have a right to it. Our future policy could be determined by present and past results.—l am, etc., ST. JOHN’S.