LOAN CONVERSIONS

Dominion, Volume 26, Issue 301, 15 September 1933, Page 12

LOAN CONVERSIONS

Position of Power Boards BULK SUPPLY CHARGES In the course of the annual report of the Power Boards Association of New Zealand, there occurs the following paragraph concerning loan conversion “A deputation from the executive waited upon the Prime Minister at the end of last year upon the subject of the conversion to lower rates of interest of internal power board loans. The deputation further urged the Government to consider whether an attempt should not be made to convert overseas loans, especially in view ’ of the presence in London of the then Minister of Finance. As regards internal loans, legislation has since been passed reducing rates of interest on existing securities, and providing for conversion of the same at lower rates of interest. The Prime Minister in his reply stated that no provision could then be made to convert London loans which had not then matured, and referred to the embargo placed by the British Treasury on further issues pending completion of the British war loan conversion. He was, however, prepared to bring forward legislation providing for the carrying forward of accumulated sinking funds on the renewal of loans, thus saving the exchange that would otherwise be payable on the transmission of the sinking funds to London. Provisions to this effect were included in the Finance Act, 1032 (N.o. 2).” Another burning topic is the differential rate for power as between country and urban authorities. On this point the report says:— “Representations have been made on several occasions to the Minister on the question of removing the differential rate as betweeh country and urban supply authorities. The department, however, contends that it is justified in making this difference, as the supply authorities themselves do not charge their large consumers at the same rate as the smaller ones. The question of an all round reduction in charges was also submitted, but as against this'the contention was that the far greater part of the department’s costs consisted of interest charges, in respect of which it obtained no relief. The executive at its last meeting resolved that while the time might be inopportune to press for any reduction, the position might be met by crediting boards with the difference between £8 and £lO for the first 200 K.V.A. by way of an augmentation of sinking or depreciation funds. This resolution was submitted to the Minister of Public Works for his consideration.”