HAWERA HOSPITAL LOAN

Taranaki Daily News, 19 December 1933, Page 8

HAWERA HOSPITAL LOAN

“NO AID FROM LOANS BOARD”

CONVERSION NOT WORTH WHILE. FRESH ARRANGEMENT WITH BANK. The Hawera Hospital Board yesterday decided not to undertake any conversion scheme as the Local Government Loans Board refused to allow the board to do so on terms that would be advantageous to the ratepayers. It was decided to accept the offer of the Bank of New Zealand to reduce repayment instalments from £BOOO to £4OOO annually. In reply to the Hospital Board's representations the Loans Board agreed to increase the term of the proposed conversion loan from 12 years to 15 years. Further than that the Loans Board declined to go as the term was longer than that on which the building loan was originally arranged. Mr. E. A. Washer said he could not understand the attitude of the Loans Board. Other local bodies in the district had no trouble, and the Treasury had even offered to send officers to Hawera to facilitate conversion of loans on a 25 years’ term. The Hospital Board could get no satisfaction. Mr. C. Harrison, secretary, said the bank’s offer was to reduce the repayment instalments to £4OOO per annum. The rate of interest was 5 per cent., but as the loan was in the form of an overdraft any surpluses in the other account could be used to reduce the actual sum on which interest was paid. The term of the loan under this arrangement would be 12 years. Mr. A. L. Campbell pointed out that under the Loans Board scheme the Hospital Board would pay interest on the whole amount for 15 years, while under the bank scheme it would become progressively less. In addition, there was the difficulty in the investment of sinking funds. Mr. W. G. Simpson asked if there would be any trouble in getting the Minister's consent, but the chairman (Mr. J. S. McKay) did not think there would be.