SINKING FUND RATE

Southland Times, Issue 22991, 10 September 1936, Page 4

SINKING FUND RATE

The Power Board’s Statement ■ NEGOTIATIONS LAST YEAR We published yesterday a statement by the Rt, Hon. J. G. Coates concerning a promise which the Southland Power Board has declared he made in September 1935, to reduce the rate of sinking fund to £2 10/- per cent. The chairman of the board (Mr J. T. Carswell) has asked us to print the following telegram which he has received from Mr J. Hargest: Replying to your inquiry as to sinking fund. When the matter was under discussion last year no percentage was fixed, but Mr Coates clearly stated that upon settlement of minor details he would adjust the sinking fund sufficiently low to eliminate the rate. For this I thanked him as recorded Hansard September 10 1935. He now emphasizes that several factors were involved; but the intention was to relieve the ratepayers of the rate. J. HARGEST. We referred this telegram last night to Mr Coates, who repeated what he said in his telegram yesterday, that the board’s request concerning sinking fund was considered, but no decision was reached because so many other matters were outstanding. Mr Coates emphasized that during these particular negotiations there were many moie things to be considered than the sinking fund; the sinking fund was only one factor. What he had said was that if all the factors could be settled in a • manner satisfactory to the Crown he and the board might be able to come to some arrangement which would relieve the ratepayers of the rate. Mr Coates added that he had now seen a copy of the board’s circular and he took strong exception to the board's statement that he had given a “definite promise” to reduce the sinking fund rate to the figure of £2 10/- per cent. Statement in House. We have been asked by Mr Carswell to publish in a prominent position the following which is a longer extract from the speech by Mr Hargest M.P., delivered in the House of Parliament on September 10, 1935, as recorded in Hansard: — “One outstanding question was that of the sinking fund. I am not going into the question of the sinking fund, but under the present Electric PowerBoards Act, it would have been essential to pay a sinking fund of 41 per cent, per annum for the remaining period, an extremely heavy burden for any community; but we are assured by the Treasury officials and by the Minister of Finance that the board will be helped in this respect, and there is every possibility of getting the sinking fund on a rate comparable with the past [which was 11 per cent.]. This is the greatest thing that has happened for many years in Southland, and I want to publicly thank the Minister of Finance for having secured a continuance of the Government guarantee, for obtaining the new loan at a rate somewhere approximating 3 per cent, and for the favourable treatment in regard to the sinking fund. It is a great thing for the province to be relieved of an interest payment of about £30,000 per annum, which will be the difference between the payment this year and next. The Minister of Finance, and associated with him the Acting-Minister of Finance—the honourable member for Wallace — have earned the thanks of the whole of the ratepayers of the province at the other end of the country, and I join with them most heartily in tendering both Ministers that thanks. Mr Carswell states that at a meeting of the board held on September 24, 1935, the late Mr William Hinchey, then chairman of the board, reported that “the speech delivered by Mr Hargest in the House was authorized by Mr Coates.” Mr Hinchey reported as follows: “We needn’t worry about the financial position as Mr Coates has given an under-taking that it will be put right.” Mr Sim, questioning Mr Hinchey, said: “Mr Coates gave an undertaking that the sinking fund would be adjusted to eliminate the rate.” Mr Hinchey: “Mr Coates gave that undertaking and he authorized it to be stated in the House.” (This last sentence was underlined in Mr Carswell’s copy and we have accordingly reproduced it in black type).