MONEY RAISED IN WELLINGTON

Southland Times, Issue 23796, 19 April 1939, Page 6

MONEY RAISED IN WELLINGTON

CITY COUNCIL’S LOAN REQUIREMENTS SUFFICIENT OBTAINED FOR SIX MONTHS A promise of assistance in raising the balance of the water, drainage and employment promotion loans at the end of six months was given by the Minister of Finance (the Hon. W. Nash)

to the Invercargill City Council, according to a report presented to the council last night by the Mayor (Mr J. R. Hanan) and the town clerk (Mr W. F. Sturman) on their recent negotiations in Wellington for the raising of the loan. The Minister has stated that the Government would be floating an internal loan, a part of which would be available for local bodies. “The position is that in July of last year we were 'able to borrow the following from the Invercargill Savings Bank Trustees at 3| per cent, per annum: Water and drainage loan 1938, £33,000; promotion of employment loan 1938, £22,000; a total of £55,000. The balance required is £62,500 and could be spread over 18 months or two years,” stated the report. “The Savings Bank and other large lending institutions in New Zealand, would not take up any more of the loan. Of the money raised we have left in the water and drainage loan only £5340, whereas our commitments for materials on order and contracts let are approximately £13,000 payable over the next four months. However, the position is that

the council had decided to carry on until March 31, 1939, when work would cease, unless we had definite arrangements for further loan money. “In the promotion of employment loan, of the original instalment we have left £15,691 and we intend continuing with work on this loan, but it will all be cut out inside six months in materials alone, even although the Government continues paying all the wages as it is at present. We conferred with the Minister of Finance on the subject, who asked us to see the State Advances Corporation and again to get in touch with him if we could not obtain financial help. We interviewed Mr Caverhill, the officer in charge of local body investments at the State Advances Corporation, and after a long discussion, he agreed to submit to his directors our request for £28,000 which we estimated should keep us going for approximately 12 months for the water and drainage loan, or alternatively an advance of £14,000 for that loan, estimated to keep us going for six months, but both contingent upon the Minister of Labour maintaining his present wage subsidy. In. view of the difficult financial position as explained to us, we did not press for further money for the promotion of employment loan, as we already have over £15,000 in respect of this loan in hand. Mr Caver-

hill asked us to - see him again next morning, which we did, and he informed us that £14,000 had been granted. We advised the Minister of Finance of the result and he informed us that he knew the position as he had already been in touch with the State Advances Corporation.

ASSISTANCE PROMISED “Questioned, by us as to what the position would be as we got near the end of the six months’ term, Mr Nash invited us to approach him then when he would be pleased to do what he could to assist. He added that the Government would be floating an internal loan, a part of which would be available for local bodies. We took the opportunity of seeing the Minister of Labour (the Hon. P. C. Webb) who said that henceforth any money for subsidizing wages would have to come from the general revenues of the country, but that we could continue with the essential capital loan works until such time as he intimated that he desired to review the position.” The following letter from Mr Nash was received at last night’s meeting:—•

“I am pleased to confirm the offer made to your council by the State Advances Corporation of an advance of £14,000 in respect of your water and drainage loan 1938 of £70,500. This amount of loan money should enable all your immediate requirements to be met. I trust that success will attend your further efforts to raise the balance of your loans on the open market, but if not I shall be glad to consider your further requirements at a later date.”

When the matter came up last evening, the chairman of the Finance Committee (Cr F. A. Webb) said it would be necessary for the council to make application to the public before going back to the Minister. Lending institutions had been approached, but without result. He formally moved that the loan be put on the open market. The motion was seconded by Cr R. T. Parsons and carried. /