Savings Bank Loan Back In Bank

Press, Volume CI, Issue 29931, 19 September 1962, Page 17

Savings Bank Loan Back In Bank

The £30,000 invested by the Canterbury Savings Bank, as iu first local body investment, with the Christchurch Drainage Board at 5| per cent interest is now back in the bank, earning 3} per cent., shortly to be increased to 4 per cent., for the board "I see where the bank is wanting to lend more to local bodies; let’s hope they don’t want to give us any more,” commented Mr E. V. Smith.’ Mr T. D. Flint saw a strong case “for complaining about the way bureaucracy is running us.”

Mr Flint raised the matter by asking where the money had gone, and the secretarytreasurer (Mr T. A. Tucker) explained what had happened.

The reason was that the board was now required to have a substantial amount of loan money in hand or in >ght before it could call tenders, said the chairman 'Mr F R. Price). It had to place money at short-term.

"The board is not able to follow the same prudent financial policy it used to,” he sa d. “We have to borrow at one figure and let the money out at a lower rate until we have the required amount.”

It was not good business to borrow money too far ahead, said Mr Smith. While he appreciated the desire of the new bank to help the board, would it be possible for the board to delay any further loans to a more opportune time without prejudicing its chances for assistance? When the board had run into financial difficulties and approached the Minister of Finance (Mr Lake) for assis-

tance through the National Provident Fund, the Minister had requested that until the board had in hand or in sight two-thirds of the loan required it should not proceed with the work, Mr Price said.

The board had been accused of being extravagant in the past when it let contracts “with little in the kitty." but that had got the work done and had saved ratepayers money, he said. Mr G. A. G. Connal said that with the new office building project the board had to have more than half the £1904X10 loan in hand before it could , call tenders: but the building would be paid for iiP progress payments.

Complaining that the system could cost the ratepayers thousands and that there seemed to be no logic in the policy. Mr Flint suggested that the board’s position should be put to the Minister. He said the request had been made at a time when loan money was scarce, but the position had improved greatly since then. His suggestion was adopted by the board.