HARBOUR BOARD FINANCE

Otago Witness, Issue 3768, 1 June 1926, Page 23

HARBOUR BOARD FINANCE

THE £350,000 LOAN

PRELIMINARY ARRANGEMENTS APPROVED. A Special Committee of the Harbour Board, with Mr J. Loudou as chairman, submitted to the board at its meeting on Friday night the following report on the board's scheme for borrowing £350,000: — Your committee recommends as follows: (1) Loan Bill: That the £350,000 Bill be proceeded with. (2) Plans: That the series of plans laid on the board table, for submission to the House, be approved. (3) Sinking fund: That provision be made for a sinking fund of 1 per cent. (4) Currency: That the term of the loan be for 35 years. (5) Flotation: That the amount required for the purchase of a new dredge be secured in Great Britain, the balance of the loan to be secured locally, if it is in the best interests of the board so to do. Mr Loudon, in moving the adoption of the report, said that after hearing Mr Dickson the committee had resolved to apply for empowering legislation for the full £350,000. Mr Dickson had informed them that the Government had insisted on a sinking fund of 1 per cent. The principle was that with the exception of the financing of the dredge they should adopt the policy of borrowing the money locally if possible. Mr Anderson drew attention to the big changes that were likely to come over market conditions at Home. He did not think they should be in too big a hurry in pushing clause 5. The Chairman said this clause was not mandatory in any way. The feeling of the committee was that it would be in the best interests of the board and of the people generally if it were possible to float the loan locally. They would note the proviso “if it is in the best interests of the board to do so.” There was no hurry about the matter. It might be possible that some part of this loan would uot be floated for some lour or five years. It would only be required by instalments. It might be found that it was not in the best interests of the board to float the loan locally, and therefore they were not binding the board iri any way by passing this resolution. Most of the members understood that it was hoped that their representative would be able to make arrangements at Home so that by paying part of the cost of the dredge in cash the builders might take-over the board’s bonds for the remainder. That, of course, they had provided for in the report, so that practically all the money for the dredge would be floated in London. Mr Gow: At a low rate of interest? The Chairman: Yes. We expect to get it at a much lower rate of interest than we would have to pay for actually giving the cash. Mr MacManus moved as an amendment to clause s:—“That the following words be added after the words ‘in Great Britain. if arrangements can be made with the British Government in its scheme to advance money to encourage British manufactured goods.’ ’’ He understood that the British Government was prepared to advance money at low rates of interest to encourage British industry. Otherwise he was of opinion in view of the experience of the City Council that the money should be raised locally. It was better to borrow the money where the people were interested and that would be to their henefit. Mr Loudon said that was part of the motion. The Chairman said he did not think the board should be tied down in any way by resolutions of this kind. Their representative would do the best possible in the interests of the board, and he though they could leave *f at that. Nothing would be done without the hoard being consulted. He believed the builders would accept perhaps four-fifthe of the money in bonds, and would accept these bonds at a cheap rate of interest Mr MacManus: Buppose you are unable to make these arrangements with the Government., would you net tie yourself up? The Chairman said they hoped to get the money cheaper where the work was being done Mr Mollei seconded Mr MacManus h amendment so that it might go to the vote. He took it they bad the money for the sinking fund all right. The Chairman: Yes. that will be no trouble. Mr Moller asked if it would not be possible to build the dredge in -«ew Zealand. The builders at Horae had not been able to find any fault with their tug, wlflch had been built here. They were going straight Home to build the dredge, but there might be a possibil ty of the lenders here being as cheapCaptain M Donald said it would he wrong to pass any resolution tying the bands of those who "were to represent them. They should call for tenders. They should never entertain the idea of building the dredge here for many reasons. Mr Larnaoh said he was afraid the dredge they wanted was too big to be built here. Mr Cable said tKeir representative was going Home to try and obtain the tag a of the Trade Facilities Act. The Chairman said they were all patriotic enough to support the British manufacturer where they could. It was not wise to tie the hands of their representatives. Mr Moller said the amendment did not tie their hands. The Chairman said their representatives were going to endeavour to do exactly wbat the amendment said. Mr Loudon made a statement on the subject in committee. The amendment was lost, and the committee’s report was adopted.