therefore excluded from the provisions of the Local Government Act as to borrowing by county councils generally.1

Works.

The original power and method under and by which the board Powers of could borrow money for the execution of its powers was defined by Metropolitan the Metropolis Management Act, 1855. The provisions of this Board of Act were, however, superseded in 1869 by the Metropolitan Board of Works Loans Act,3 which with some modifications still controls the matter, and under the provisions of which, with the amending Acts, the London Council will borrow. All money borrowed (except in the case of temporary loans for a period not exceeding six months) must be borrowed in accordance with the provisions of that Act and the yearly Money Acts.

stock.

The Loans Act empowers the board to create a capital stock Metropolitan to be called the Metropolitan Consolidated Stock, to be issued at consolidated such times and price and in such manner and on such terms, etc., as the Treasury may approve." This stock is to be charged on whole lands, rents, and property of the board, and on all rates to be levied by it. The Public Works Loan Commissioners and the Commissioners for the reduction of the National Debt," are empowered to advance money to the board on the security of such stock.

The board may with the approval of the Treasury enter into arrangements with a bank for the creation, transfer, and management of the consolidated stock and the keeping of books in reference thereto." The arrangements under this section have been made with the Bank of England.

For the purpose of paying dividends on the consolidated stock Consolidated. and for the purpose of providing for its redemption, the board loans fund. were required to establish and have established the Consolidated Loans Fund.10 To this fund the board has carried the produce of all sales or leases of property, the residue of an improvement fund created by the London Coal and Wine Duties Continuance Act, 1861,11 and such sum out of the consolidated

1 L. G. A., secs. 40 (9), 69, and 70. 2 M. M. A., 1855, sec. 183.

3 32 & 33 Vict. c. 102.

4 L. G. A., sec. 40 (9). 9 Ibid., sec. 17.

8 Ibid., sec. 9.

The estimated cost of bank management for metropolitan stock for the year 1888, was £11,050. The interest on cash balances and stocks in 1887, was £12,201.

10 32 & 33 Vict. c. 102, sec. 26.

11 As to this: see 24 & 25 Vict. c. 42, 26 & 27 Vict. c. 46, and 31 Vict. c. 17, providing for the opening of an account in the name of the Lords Commissioners of the Treasury at the Bank of England, to be called "The Thames Embankment and Metropolis Improvement Fund.” The produce of the wine duty and 9d. of the coal duty were payable into this fund which, until July 5, 1888, was to be applied in paying off certain securities issued under the Thames Embankment Loans Acts, 1864 and 1868, and the residue carried to the Consolidated Loans Fund. When the securities were paid off the Improvement Fund was to be transferred to the board, and this was done in August, 1884.

rate as was necessary in the opinion of the Treasury to redeem the consolidated stock in sixty years from its creation.1

The consolidated loans fund is to be applied by the board under the regulations of the Treasury in payment of dividends on the consolidated stock, and in the purchase or redemption of consolidated stock and of securities granted before the passing of the Act.2

In the year 1887 there was paid into this fund, under the aforesaid provisions:

£

320,973

88,080

74,969

Interest on cash balance and deposits

12,201

Interest on loans to Asylums Board, School

Board, Vestries and District Boards,

Local Boards, Poor Law Guardians, Burial

294,375

Boards, Bath Commissioners, etc

Board of

Works

The borrowing powers of the Metropolitan Board are now limited from year to year by the Board of Works Money Acts.3 Money Acts. They have powers so given from year to year to issue consolidated stock and to raise money by Metropolitan Bills.5

4

The borrowing powers of the Board of Works were consolidated by the Board of Works Loans Act, 1869.6 At that time nearly £8,000,000 had been borrowed by the board, and the Act gave them authority to borrow up to £10,000,000. This sum had been all borrowed in 1874, and the board in that year applied to the Treasury to sanction an extension of their borrowing powers. The Treasury, with a view to bring the financies of the board under the more frequent purview of Parliament, declined to consent, unless an annual Bill were presented to Parliament in which 32 &

1

33 Vict. c. 102, sec. 27. 2 Ibid., sec. 28.

3 See M. B. W. Money Act, 1888, Appendix I. G.

4 Ibid., secs. 15 and 21.
5 Ibid., secs. 17-20.

6 32 & 33 Vict. c. 102.

the maximum amount proposed to be borrowed for the ensuing year should be fixed. Since this arrangement was come to, a Bill has been presented to Parliament every year-prepared by the board and introduced by the Treasury-in which the amount and the purpose of each loan is set out. The London Council will thus be only able to borrow from year to year.

The Treasury required, and there have since been attached to these Annual Money Bills, tables setting forth the liabilities of the board and the rateable value of the metropolis.

2

The money borrowed by the board where raised for the purchase of freehold land, the widening of streets, and similar improvements, is repayable over sixty years; where borrowed for fire brigade plant, the erection of buildings, etc., it is repayable within thirty years.

Board of

The amount of metropolitan stock outstanding on Decem- Loan liabiliber 31, 1887, was £27,047,577. If to this there be added outstand- ties of ing old liabilities £231,800, the gross debt of the board on Metropolitan December 31, 1887, was £27,279,377. Under the powers of lending Works. to local authorities hereafter mentioned, the board had outstanding from such authorities £8,417,228, and a credit balance with the consolidated loans fund, of £1,497, thus leaving an outstanding debt incurred by the board for its own purposes, of £18,860,652.3 This debt will be the chief liability transferred by the board to the new London Council. The board valued its surplus land and property as an asset at £2,382,753 and debited itself with a contingent liability of £587,065 in respect of the liability to redeem metropolitan stock at par.

The London Council as successors of the Metropolitan Board Future duties of Works will have to prepare Money Bills year by year. They of council. will have to prepare and attach to such Bills tables giving such information as the Treasury require for the purpose of enabling a comparison to be made between the rateable value of the administrative county of London and the liabilities of the council. They will also have on or before the 1st of June in every year to prepare a return to be laid before Parliament showing the consolidated stock and consolidated loans fund accounts and other loan transactions with an estimate of the expenditure of the council for all purposes for the current year.

Lending Powers.

The first power of lending money to other bodies by the board Borrowing was given by the Loans Act of 1869 as to the Asylums Board.5 authorities. Since that time further powers have been given by various Acts

1 See Money Act for 1888, Appendix I. G.

2 See 32 & 33 Vict. c. 102, sec. 27, and 34 & 35 Vict. c. 47, sec. 9. This is twice the period allowed for loans of county councils generally under the L. G. A.: see sec. 69.

38 & 39
Vict. c. 65, sec. 12.
5 32 & 33 Vict. c. 102, sec. 37.

Amount borrowed.

of Parliament for the Board to lend money to the Asylums Board; the School Board; vestries and district boards; the receiver for the metropolitan police district; boards of guardians and other bodies in London having power to levy rates and borrow money; the Hornsey and South Hornsey Local Boards; the Beckenham Sanitary Authority; and the West Kent Main Sewerage Board.

The power to lend is now given each year in the Board's Money Bill and also the authority to which it is proposed to lend and the limit of the loan is stated. There is thus in each year for each loan specific statutory authority. When the Local Government Bill, 1888, was passing through Parliament, the power for county councils to lend was struck out, and it might be a question whether the power to lend was one of the transferred powers" of the board, but any difficulty of this kind is cured by the necessity of obtaining special statutory authority in each case.

66

The advantage to the minor authorities in London of being able to borrow through the board is obvious. The credit of metropolitan consolidated stock is extremely good, as well it may be, considering the security on which it rests. The last issue of three per cent. stock was tendered for in November, 1887, at an average price of £100 6s. 4d. The local bodies reap all the advantage of the board's credit and obtain money at a much lower rate than they could borrow it for themselves.

The London School Board has borrowed nearly four millions sterling in this way, the Asylums Board more than one million, and other bodies, about a hundred in number, the balance of the sum of £8,417,228, which had been thus lent on December 31, 1887.3 The terms of repayment in the case of these loans is, in many cases, less than those imposed on the board. Thus, the school board borrows for school buildings on a fifty years' term; other buildings and schools on thirty years and twenty years; loans for granite paving are for twenty years; fittings and furnishing, fifteen years; asphalte paving, seven years; wood paving, six years; tar paving, five years, etc.

Contributing Powers.

The London Council, as successors of the Board of Works, will be empowered to contribute towards the cost of minor street improvements made by the city commissioners of sewers and by vestries and district boards. Hitherto, when requested so to contribute, the board has investigated the site of the proposed

1 See e.g. M. B. W. Money Act, 1888, secs. 8-13, Appendix I. G. 2 The issue price of a 3 per cent. stock after the passing of the Loans Act in 1869 was £94 145. 10d., shewing a great advance in the cheapness of the rate at which the board can borrow.

3 See detailed list of these: Appendix II., Table VII.

4 18 & 19 Vict. c. 120, sec. 144, and 25 & 26 Vict. c. 102, sec. 72.

improvement, and if they thought the improvement of general advantage, they contributed towards the cost a sum not exceeding one half of such cost. This contribution is, however, quite discretionary. In 1887, the total amount agreed to be contributed in respect of thirty-five improvements, was £58,929, of which the city was to receive in respect of five improvements, £38,639.

Audit.

The accounts of the London Council are to be made up annually in a form prescribed by the Local Government Board.1 They will then be submitted to district auditors appointed by the Local Government Board. Hitherto, the accounts of the metropolitan board have been audited by an auditor appointed by the Treasury.2 As to the new form of audit the Local Government Board are empowered to make from time to time such regulations as they deem necessary or proper respecting it. These regulations will contain all needful provisions as to the audit and the mode of conducting it.3 The auditor will fix the time of holding the audit. He will give notice of this to the council.

The council will deposit a copy of their duly balanced accounts, together with the vouchers in their office, and must give fourteen days' notice of the time and place of the audit and of the deposit of the accounts. The accounts so deposited will be open to the inspection of all persons interested, for seven clear days before the audit, and all such persons may take copies or extracts.*

Any ratepayer or owner of property may be present at the audit and may make objections to the accounts. He may also appeal against any allowance made by the auditor. The auditor has power of disallowance and surcharge. Any person aggrieved by a disallowance may apply to the Queen's Bench Division of the High Court for a writ of certiorari, or may appeal to the Local Government Board. The general practice in case of disallowance by district auditors has been to take the latter course and appeal to the Local Government Board, which body has plenary authority to deal with the matter.

The auditor must make a report on the accounts within fourteen days after completing the audit. This report must be sent to the clerk of the council and by him deposited in the office of the council. The clerk of the council must then publish an abstract of the accounts.

1 L. G. A., sec. 71 (1).

2 See 34 & 35 Vict. c. 47, sec. 18.

3 District Auditors Act, 1879, sec. 5: see Appendix I. F.

4 L. G. A., sec. 71 (3), and Public Health Act, 1875, sec. 247, subsec. 4, post, Appendix I. B.