MONEY FOR POWER

Evening Post, Volume CIII, Issue 83, 8 April 1922, Page 9

MONEY FOR POWER

NO STATE GUARANTEE

COMBINED LOAN SUGGESTED

A request for a Government guarantee for loans raised abroad by power boards was made by representatives of the Wanganui-Hangitikei, Horowhenua,Dannevirke, Manawatu-Oroua, and Tararua Power Boards, which waited on the Prime Minister and the Minister of Public Works yesterday afternoon. Mr. Massey said he could not do this.

Mr. J. A. Nash/M.P., who, with Mr. W. H. Field, M.P., headed the delegates, said that the deputation was the outcome of a conference held at Palmerston North a fortnight ago. He estimated that the boards represented were going to require about £1,000,000 within the next two years or so for tho reticulation of their districts and the other works connected with the distribution and utilisation of the Mangahao power. The Minister of Public Works had stated that the Government would be ready to supply the power at the end of 1923 ,and if that were so it was highly important that the districts should make their preparations without delay. The boards wanted to know what the power was going to cost them, and they wished to suggest that the Government should undertake to raise the money they required on the London market. If the boards had to go direct to the London market they would not get such good terms as the Government could get. If the Government could not borrow the money itself, and hand it on to the boards, would it give their loan the State guarantee? Mr. Massey: "I cannot do it." Mr. Nash: "The Thames j Power Board had the State guarantee.",

Mr. Massey: "That was some time ago. I can tell you all about it." -

PURCHASE OF SUPPLIES.

Mr. Nash said that the boards were very active at present. They were ap■pointing their engineers and preparing 1 to proceed with their works, but they .wanted the assistance of the Government 'in getting their money on the best possible terms. They were aware that the money could not be borrowed locally. They asked, also, if the Public Works Department would give them the assistance' of its organisation in the purchase of poles and other supplies. Mr ; Field said that in his district the people were most anxious to proceed with the scheme, and they must raise money if they were to be ready to take the power from the Government at the end of next year. He hoped that even if the guarantee could not be given, the Government wouk 1 be behind the boards in some way. The boards were working together because they believed, they ■would be able to get better terms in combination.

Members ■o! the deputation emphasised the points made by the two members. They said that the existing legislation did not permit a gtoup of boards to raise a combined loan. They suggested the amendment of the legislation on this point. - The MinisteT of Public Works (the Hon. J. G. Coates) said the Government had intended to propose such an amendment during the recent session of Parliament, but in the rush of other work the matter had not received attention. He did not know that an amendment was really necessary. ■ Several boards could place their loan business in the hands of one agent in London. } Mr. Nash replied that better terms ■could be obtained if the boards were able to offer security over a combined district. PRIME MINISTER'S REPLY. The Prime Minister, in reply, said he wanted the members of the deputation to realise that when they asked him to find their money for them they. wer» asking him to find all the money required by the power boards throughout New Zealand. He could not assist one board and not another. Just what their total requirements would amount to he could not say, but probably the power boards of the Dominion would require a sum of not less than £20,000,000. "I may just as well tell you plainly that it is quite impossible for the Government to borrow the money for you or to guarantee thf loans," said Mr. Massey. "It is true that Southland and the Thames Valley got the Government guarantee behind the loans that they Taised in London. But when I went to London last year and met the representatives of the Stock Exchange, they asked me about these guarantees. I told them the position, and they informed me that the use of the Government guarantee m this way was going to ruin the credit of the Dominion of New Zealand, and Tiake the Government pay a higher rate of inter.est for the money borrowed for national purposes. They said that as promises had been made they would not stand in the way of the Southland and Thames loans, and those districts got their money. But the effect of raising all the-money required by the power boards with the assistance of the Government guarantee would be to injure our credit seriously." ■

MONEY MORE PLENTIFUL. Mr Massey added that he liked the idea of combination among the boards. They would get better results if they worked together than if they _ stood apart. • The Government would give the boards what assistance it could if they decided to go to the London money market. It would allow them to make use of the Government's organisation in London. He did not doubt that they would be able to get the money. The Auckland City Council had asked for the State guarantee, and he had been compelled to reply that the national credit would be injured if the guarantee was used in the way that had been contemplated. But Auckland had still raised its money without difficulty, and on very good terms, though not quite such good terms as the Government could get. Much depended upon going about the business in the right way. Mistakes had been made in some instances, and difficulties had been caused. Money certainly was becoming more plentiful. If an amendment of the Act was necessary to enable the Boards to combine in borrowing money abroad, he would put the amendment before Parliament early next session. There need be no delay. Mr. Nash said that the board would be tied right up if they did not get the money quickly. Mr. Coates: " There are people in Wellington to-day who are prepared to undertake the financing of the whole thing. You have to watch the prices, but there is competition for the business that you have got." LOCAL OFFERS. The Prime Minister confirmed this statement, and the, Minister of Public { Works added that the people he had in mind were prepared to finance the pp_erations or to take contracts for carrying out the reticulation. They were looking for the business. Mr. Nash : "I had an offer from Auckland to carry out the whole of the reticulation." The Minister o{ Public Works ad-ded that his Department would be prepared

to assist the .power boards in the purchase of supplies on a business basis. It could not spare them the services of officers, but they would be allowed to make use of its buying organisation. He was very glad to hear that the boards we're moving. He had been afraid that they would not be ready to take the power.