1.—7

4

may be an interval of time—perhaps a fortnight or so—during which the funds cannot pass; we would not have power to get an advance unless we inserted this provision. 17. But you do not limit the rate for that purpose ? —lt might be only temporary. It would only be for a fortnight or so; or at most a month. We would pay, of course, the usual bank interest. 18. In the Consolidated Stock Act there is a provision to enable the Commissioners to issue short-dated debentures?—We talked that matter over with Messrs. Chapman and Leary, who thought this was sufficient. This gives the Commissioners power to pledge the securities with their bankers, or to sell out some mortgages. 19. Do you see the amendment which has been put into clause 3 ?—Yes ; I do not object to that. 20. Mr. Allen.] What do you say your saving of interest would be?—Close on £5,000. If the new loan is the same amount as that at present existing at 4J- per cent., the annual saving would be £4,979. If we have to add the amount of cash conversion to the loan it would be decreased to the sum of £3,982. 21. That is, if the converted loan is all issued in debentures?—Yes. 22. With regard to sinking fund set free, you explain that that is to pay off the bank overdraft ?—Yes. 23. What security have we that that overdraft may not remain at the maximum, or that it may not even be raised?—You have only the security of common-sense and prudence. It would necessarily take many years before it would mount up again, if ever. It would be a bad thing to pass any clause to prevent us getting an overdraft such as we might require. When this scheme shall have been completed, and operations begun under it, our finance will be absolutely sound; there will be no necessity to get an overdraft except for some large work, because we will have £2,500 extra a year for works, and I think that would suffice. We might on some occasions have to get an overdraft of £4,000 or £5,000, but only in some special circumstances. 24. Do you not think it would be advisable to put some limit on the opportunity of getting overdrafts ? —I think you must trust to the good sense of your representatives in the Council. If you do not get good men to go there it is your own fault. I think, from the experience.we have had, that good men can always be found to be put there. There is no doubt the possibility that , public confidence may sometimes be at fault, but it is improbable. I do not think you should impose a limit. To do so would prevent, at times, the carrying out of very desirable improvements in Dunedin. 25. Hon. Mr. Beeves.] You have a rate for water and gas? —For gas we charge a price. 26. What is the price of gas?—7s. 6d. We charge only ss. for gas for cooking purposes or motive-power. The first charge is undoubtedly excessive. It is my strong wish, and I think, when this scheme shall have been carried out, it will bring about, as an immediate result, that both the gas and water accounts will be placed on a proper footing. My great anxiety is to get our municipal finance on a thoroughly sound and proper basis. When once that is so, I hope it will be kept so. I feel assured that this scheme will enable us to bring that very desirable state of things about. 27. Mr. Allen.] Suppose that in 1898 you pay that £25,000, you would be saved 7 per cent. ? —The saving would be about £2,000, but then we would have to pay 4J per cent, on our bonds, which we would give in place of it. We would only save about £1,000 a year. 28. The proposal is to transfer to the Sewage Loan Account any cash that may not be used to pay the cash cost of the conversion. That seems practically a loan of that money ? —Of course it is in a sense a fresh loan ; but it is not in another sense, if we lock it up for the purpose of providing interest on another loan, which we must get shortly. 29. That is the question lam coming to. This really is a capital account. If I understand rightly it is not intended to keep it a capital account, but to pay interest with it. Is that a wise proceeding ?—lt is wise for this reason : if the citizens can be assured that, for a number of years, they will not be called upon to pay a drainage rate for a new drainage loan, then we can induce them, to vote for a new loan for drainage. The importance of this may be estimated by the consideration that a new loan would probably involve a shilling rate. If we went in to borrow, say £100,000, they might say :" We will not give you the necessary power." But if we were in a position to say to them, " Seeing that, owing to the accretions of interest on the £22,000 and the capital in addition, you will not be called on for another seven years to pay interest; " how important this would be, Mr. Bell must know, for his experience in Wellington must have informed him of it. 30. Next, as regards section 20 of the Bill? —That is taken from the Oamaru Act of 1893. I telegraphed our solicitor re this, and the replied as follows : " Clause 20 is to show lenders that there can be no hitch about the rate. It is taken from the Oamaru Act of 1893, and is to silence technical defences such as were successful in the Waimea Plains case, and many others. Such a clause is now usual, as Mr. Bell could tell you. 31. The Chairman.] I want to ask you, Mr. Fish, what is the total amount of interest you are now paying on the loans which you propose to convert ?—The total amount is £11,879 and £1,740 for sinking fund. 32. What is the amount of interest you anticipate by this conversion that you will have to pay? —£4,000 a year less; that is, £4,000 on extended debentures; £5,000 less, if we give cash for conversion. 33. You make no provision for sinking fund ? A permanent debt ?—Yes. 34. What is the rate per cent, you will be able to get it for?—l mean, what is the rate of interest you will have to pay ?—Four and a half. 35. Have you any evidence or information that warrants you in fixing that as a base for your calculations ?—We fix it, of course, at that rate because we think it a fair one, and we have based our calculations as to cost of conversion on that basis.