£50,000 HARBOUR BOARD LOAN

Press, Volume XCIII, Issue 27912, 8 March 1956, Page 14

£50,000 HARBOUR BOARD LOAN

INVESTORS ADVISED TO HOLD MONEY CRITICISM OF SECRETARY BY MR G. MANNING The action of the secretary of the Lyttelton Harbour Board (Mr A. L. Burk), in advising prospective investors in the board’s £50,000 loan being raised for the completion of No. 7 wharf to defer investing pending a review of interest rates, was challenged by Mr G. Manning at a meeting of the board yesterday. Mr Manning claimed that Mr Burk’s action, which the chairman (Mr W. P. Glue) supported, was prejudicial to the efforts of other local bodies attempting to raise money, and that relations between the harbour board and other local bodies had been endangered. Mr Manning said the advice would not have a good effect on persons investing “from humanitarian motives” if they saw other prospective investors being told to hold money back a short time in order to take advantage of more favourable interest rates.

“With the uncertainty of the future rate of interest on local body loans, I concurred with the action of the secretary,” said Mr Glue. “I consider that such an action will materially assist the board to maintain its good relations with the investing public. “It has paid dividends already. Numbers of people have rung up and told us they will be investing.” he said.

“I raise no objection to the secretary advising prospective investors in the loan for the harbour board.” replied Mr Manning. “I have no quarrel with that, but I think that it is impolitic that there should be a general advice to investors to hold up investments at the present time because there may be an adjustment in the interest rate. We know that there are scores of local bodies in and around Christchurch and New Zealand who are making a serious bid to secure loan money to carry on work desperately needed at the present time—hospitals. drainage, sewerage. “When this was done, the board might have done a disservice to other local bodies who are seeking urgent finance,” said Mr Manning. “The statement coming from the officers of the harbour board was not. shall I say, conducive to best relations between local bodies, and conducive to the urgent public works that they are crying out for. “I have no quarrel with harbour board investors being informed? but when it gets out to the public I feel a certain diffidence in concurring with the statement,” Mr Manning said. Effect on Market Mr Glue: Do you think it has dried up anything? Mr Manning: I should say this —I have read in the last week numbers of advertisements appealing for 4| per cent, loans, appealing that these humanitarian works must succeed, fueling someone might invest out of humanitarian motives at least. Then another local body says, “Hold up investing and wait for a higher rate of interest.” Mr Burk, in explanation, said he had had an inquiry from a newspaper commercial reporter asking whether the loan had been withdrawn from the market. Rumours had been rampant about changes in the interest structure, and one rumour that the harbour board had gone off the market had to be scotched. “There is going to be a review of the structure, and I felt that if money was invested and interest rates went up in a week, it would not make for good relations between the board and investors.” Mr Eurk said. “I am sorry if I have hurt anyone’s feelings. We are on the money market, and we will be on it for a long time. We will not lose any standing by the action we have taken.” No action was taken by the board.