The River Murray Commission asks to be advised on the question raised in the following letter from the Secretary:

The following is a copy of a letter received from the Constructing Authority for South Australia which was considered by the River Murray Commission at its recent meeting:

The attention of the Government has been called by the Engineer-in-Chief to the fact that ever since the inception of the River Murray Commission the money expended on the weirs, locks, etc. of the River Murray has been provided by the South Australian Government, and as the advance is far above the South Australian quota and would not have had to be provided had the Commission arranged their own financial matters, it would appear that it would only be a fair thing for the South Australian Government to charge interest on the sums advanced by them. Under the circumstances I am to ask whether the Commission would be willing to pay interest at the rate of 4 3/4% on the amount so provided by the South Australian Government for the construction of works over and above the South Australian quota of the expenditure; the date from which interest would commence to be paid would be 1 February, 1917.

The Commission would be glad of your advice as to whether the claim for the payment of the interest in question should be met out of moneys advanced by the four Contracting Governments for purposes of the Agreement.

For your information, I have to state that prior to 1 July 1919 (from which date the Commission arranged for the necessary advances to meet estimated expenditure to be made to the Constructing Authorities), all expenditure incurred on River Murray works was met out of moneys provided by the three State Governments.

Should it be necessary, in order to enable you to furnish an opinion on the matter herein submitted, for you to be supplied with information as to the amount of expenditure incurred by the Constructing Authority for South Australia, the amount of that State's quota towards the total expenditure incurred by the three Constructing Authorities (vide clause 34 of the Agreement), and the amounts of reimbursements made to the South Australian Government, during the period in question, I will supply you with a statement thereof.

In this connection, I have to invite your attention to the opinion of the Acting Commonwealth Solicitor-General, dated 31 December 1918⁽¹⁾, on the question of the reimbursement to the Constructing Authorities of amounts representing interest on loans, included in statements of expenditure submitted to the Commission.

I understand that prior to 1 July 1919, the Commission did not call upon the Contracting Governments to provide any moneys under the Agreement, but that in 1917 and 1918 estimates were prepared by the Commission under paragraph 34 of the Agreement and forwarded to the Contracting Governments, and that the expenditure incurred by South Australia and the other States during those years was in accordance with those estimates.

Moreover, I understand that since 1 July 1919, the Commission has called up from the Contracting Governments their quotas of the capital expenditure of the three States during the preceding two years, and has, out of these receipts, reimbursed the Constructing Authorities for their capital expenditure.

South Australia now claims that interest on the amount expended by her in excess of her quota should also be paid to her out of the amounts contributed by the Contracting Governments.

In my opinion the claim is a legitimate one. Under the Agreement, South Australia was entitled to have the amount of her estimated expenditure advanced in the year of the expenditure; and the effect of the payment for interest will be to distribute the interest charge according to the quotas in which it would have been borne, had the quotas of estimated expenditure been called up from the Contracting Governments in the first instance.

[Vol. 16, p. 290]

(1)Opinion No. 888.