REBUILDING OF HOTEL

New Zealand Herald, Volume LXIX, Issue 21325, 28 October 1932, Page 13

REBUILDING OF HOTEL

£44,000 IN STATE LOANS NAPIER CASE CRITICISED UNEMPLOYMENT BOARD FUNDS [BY TELEGRAPH —SPECIAL REPORTER] WELLINGTON, Thursday Tho assistance given by State departments in financing the rebuilding of the Masonic Hotel at Napier has been mentioned on several occasions in tho Budget debate. Justification for such action was pleaded by Mr. W. E. Barnard, member for tho district, who was tho first to raise tho subject. He said £21,000 had been advanced by tho State Advances Office on first mortgage, the department acting on behalf of tho Hawke's Bay Rehabilitation Committee, and the Public Trusteo held £15,000 on second mortgagee. The Unemployment Board made a loan on third mortgage of £BOOO, making a total of £44,000. The cost of the building was £42,000, and ho was reliably informed that the land on which the hotel was built was worth at least £25,000. The position was that £44,000 had been loaned on the security of £67,000. Significance of Building Dealing with the reason for tho Unemployment Board's loan, Mr. Barnard said that there had been difficulty in making arrangements to rebuild. The importance of the Masonic Hotel to the town had been stressed, and it was felt that unless it was rebuilt there was great danger of that portion of Hastings Street not being rehabilitated at all. It was not a case of a loan for rebuilding a hotel, but a loan to help a very important part of Napier to go forward. A condition was that all labour should be taken from the unemployed register. The men were paid standard rates of pay. Tho arrangements outlined by Mr. Barnard were subsequently criticised by Mr. C. A. Wilkinson (Independent—Egmont), who said that the State Advances Department had been established for the purpose of assisting settlers, but there was not a settler in the country who could get a penny out of the institution at present. Nevertheless, the department had lent £21,000 on first mortgage for the construction of the Masonic Hotel. On second mortgage the Public Trust had advanced £15,000, in spite of the fact that settlers were unable to obtain assistance from this department and would bo sued if their payments were in arrears. There was no 'doubt that taxpayers of the Dominion would resent tho action of the Unemployment Board in taking up a third mortgage of £BOOO. Funds administered by the board were for the relief of unemployment and should not have been used for other purposes. Another Protest Made The total amount advanced by the three departments had been £44,000, or £2OOO more than the contract price. The whole thing was wrong and should never have happened. A protest was also voiced by Mr. D. McDougall (Government —Mataura). He said he was surprised that Mr. Barnard had endorsed the action of the Unemployment Board in spending its money in such a manner. The action of the board meant that a public house was being built out of the wages of workers. "Personally, I quite approve of what was done by the Unemployment Board," said Mr. J. A. Nash (Government —Palmerston) speaking this evening. "It means a subsidy as far as building is concerned, and it means employing men at award rates. I am also glad that the Labour Party approves of what was done." Labour Voices: Who said that ? Mr. Nash: It seemed to have tho approval of the Labour Party when Mr. Barnard suggested it. Mr. P. Fraser and Mr. J. McCombs: No, no. Mr. Nash: Apparently then the Labour Party is not as united in its ideas as I thought.