LOANS BOARD

Wanganui Chronicle, Volume 76, Issue 178, 31 July 1933, Page 8

LOANS BOARD

REPLY TO CRITICISM •■JIOT WELL FOUNDED WELLINGTON, July 29. Inquiries made this morning indicate that the criticism of the Mayor ot Auckland, particularly as to tne constitution of the Local Government Loans Board, is not well founded. The Mayor remarks that of the live members of the Loans Board three are departmental officers and two are out aiders. Actually, the board comprises seven members, three being oiiicers ot the Public Service, and four are outside members representative of local body interests. Inquiries show that the meeting which was called to consider the applr cation of the Auckland City Council was a special meeting, and in view of the urgency of the matter owing to the expiry of the Local Authorities Empowering (Belief of Unemployment) Act, 1926, on July 31, it was not feasible to call a full meeting of the board. The whole proposal was, however, discussed with the two members, who were not present, by telephone before the board’s decision was given, and lhe Post is informed that the decision not io sanction the loan without taking a poll of the ratepayers was a unanimous one. The Mayor’s statement that Government Departments have control so far as decisions of the board are concerned is stated to be incorrect. It is understood that most of the works covered by the application of the Auckland City Council were works which should be undertaken in the normal course of city development, and i his was no doubt taken into consideration by the board in declining to Banciion a loan as for relief of unemployment. No Reason for Delay As to the urgency of the matter, inquiries show that whereas the Auckland City Council had the question of raising the loan under consideration since December last, the actual appli<ation to the Loans Board was nor received until just a short time before the special meeting which was held to consider it. Thus, it is stated, the < ouncil should have been able to formulate its proposals for submission to a poll of the ratepayers, for the necessary formalities in connection with the poll take approximately six weeks only 10 complete, and the application had been under consideration upwards of six months. The Mayor has also made the statement that the application may have been approved by the Loans Board if the board had known that the formalities in connection with the loan could rot have been completed. The Post is informed that there is no justification for this statement, and that while the point may have been raised as to the ability of the City Council to complete the* formalities, the reason was that a difference of opinion apparently existed between the legal advisers to lhe City Council and the legal advisers to the lenders as to whether the loan money actually had to be paid to the City Council before July 31, the date upon which the present legislation expires. Unemployment Board’s Part L’Le point was also made by the Mayor that arrangements had been entered into with the Unemployment Board in. connection with the proposed works. It is understood that the manner in which the loan moneys to be provided by the fity Council were to be raised whs not taken into consideration by the Unemployment Board, and that unemployed labour will be made available whether or not the work is undertaken out of a loan authorised by a poll of the ratepayers. The opinion has been expressed by the Mayor that the board has exceeded its functions in not granting the loan. Lt is claimed by the Loans Board that the Mayor is not fully cognisant of the statutory obligations Imposed on the board by the legislation under which it was constituted. Mr. ooates’ Statement Lu his criticism the Mayor .also kated that he felt convinced that in . it ructions had come 2rom the Ministei ; >f Finance in regard to the application. I’he Kt. Hou. J. G. Coates, when approached concerning this statement, gave it a complete denial, and stated i oat he had no control over the acts and deliberations of the Local Government Loans Board, which is a statutory body charged with the duty of con >idering loan applications of local bodies. The Minister also referred to the statement that the secretary to the Treasury, as chairman of the board, apparently did not want anybody to go on the money market in competition with the Government over the counter sales at 31 per cent. “Such an assumption/’ stated Mr. Coates, “is quite wrung, and I am informed by the • hairman of the board that such a consideration had obviously no connection with the board ’s decision, as a loan has actually been sanctioned.” Mr. Coates concluded by stating that <he inquiries he had made concerning the application of the Auckland City Council indicated that the local Government Loans Board in declining to sanction the lodn without a poll of the ratepayers was affirming a principle it had long held that comprehensive proposals should be proceeded with in the normal manner under the Local Bodies Loans Act, 1926. “This view,” said Mr. Coates, “coincides with the views of the Government, as witness the recent intimation that the Local Authorities Empowering (Relief of Unemployment) Act, 1926, should be allowed to expire on the 31st instant.”