HAJRBOUK BOAED. LOAN.

Taranaki Herald, Volume XL, Issue 8981, 14 January 1891, Page 2

HARBOUR BOARD LOAN.

.#. LETTERS FROM BONDHOLDERS TO THE BOARD. At the Harbour Board meeting to-day (Wednesday), letters as under from bondholders were read: — Tho National Bank forwarded the following circular, dated London, Nov. 13, 1890, which haa been issued to each bondholder by Mr Daniel De Pass : — "I shall be obliged if you will furnish me with the numbers and amounts of bonds held by you, so that I may prepare a list of all holders of the above bonds. I have reason to believe that the Council of Foreign I Bondholders may be induced to interest themselves on 'our behalf and take such action as may be determined on later on, but the first step is to put oui selves in touch with one another, so that we may act unitedly. You will be advised when a meetiug of those interested will take place. P.S. — This circular will be kindly forwarded by tho Bank of New Zealand." Mr W. F. Grlubb, solicitor, writes from Great Farrington, Devon, under date November 12, 1890: — "As a bondholder for £1000 I write in reply to your circular to say that 1 thought the .New Plymouth Harbour Board a safe security. There were three means of income — one from the reserve of the Harbour Board, another from the la rateable value on the land (and as the Is rateable value on the land was not used for 9£ years it seems very doubtful whether these 9£ years arrears at Is could not now be made available), and the other, quarter of an enormous quantity of waste land, which was guaranteed to be paid over on sales occurring. The Is rateable value seems, according to you, the only source of income left, and on this you seem to derive your 1 estimate, but by your own showing the Government have broken their agreement by deferring cash payments, and thi* source of income has come to an end. Have you not failed also in placing a Harbour Board rate sufficient to meet the deficiency V If the bondholders will take j my advice they will exercise the powers given them by the Harbour Board Act) and on default in payment, take the harbour and all its belongings in hand, and levy such dues as will make up the deficiency. This, then, would either oblige you to levy a rate sufficient for the purpose, or compel the Colonial Government, which is the preferable plan, to guarantee the loan and interest, as per prospectus, and pay all costs. I cannot but think that this is not an accident, but done to compel the bondholders to accept 3 to 4 per cent., but you seem to forget the loss and ruin you thereby cause to poor shareholders by realising their property 1 at a ruinous loss in a panic. A copy of this letter is sent • to Daniel de Pass, Esq., Chairman of the Protection Committee, Fenchurch Buildings, E.G., London." The Chairman said that Mr Glubb appeared to misunderstand the whole position. Mr Walter Busby wrote from London, under date November 5, 1890: — "Your letter, dated September 6 last, which has just been published here, has occasioned some disappointment and a great amount of ill-feeling against the New Zealand Government. The petition to which you. a'ludo was influentially signed here, and the only intimation we have had of its fate is that contained in your letter. The Government appear to think they can take advantage ..of their position to deceive investors here, and then treat them with very scant courtesy and respect. We feel, however, that the matter must not be allowed to rest where it is, and if you can suggest any practical process by which united action can be taken by your Board and the bondholders against the Government, I shall be pleased to learn your views and place them before ray clients. That the Government deliberately suppressed your first letters proclaiming the default of your Board in order to cover their own financial exigency and mislead the public bore is admitted by a member of the New Zealand " Ministry " — tho- -Hon. -Edward Mitchelson — in reply to a question asked in the House of Representatives on June 2 last. The whole difficulties of your Board, too, are entirely due to the action of the Government, who first grant you an endowment of land on certain conditions, and then pass an Act rendering the endowment valueless, without giving the bondholders any quid pro quo for what they were deprived of. Trustees were induced to take the bonds of your Board, being assured that the interest was safe and practically protected by the Government, and this view' was to some extent justified from the fact that the Government did actually provide funds on two occasions. If they had' allowed your firafc letter to come over without suppressing it, these trustees would not ■■ have suffered the. serious loss they have sustained. In our case a purchase was made of over £3,000 bonds only a iortnight or three' weeks before your Board defaulted. The New Zealand Government may flatter themse'ves that they are masters of the situation, and can with impunity mislead and deceive tho British public. They .are certainly in a position 1 '"- to do so, but we find 1 it very hard here to reconcile the treatment of the Board and its ' bondholders here with 1 that honorable and upright dealing which we have a right to expect from the representatives of a colonial Government." Mr Kyngdon asked what action the Board intended to take with reference to . the letters ? ■ , , - The Ohaibman replied that he intended' to answer the .letters, but the subject needed some thinking out, and it was his idea to have another meeting of the Board to consider the letters before the mail closed. Mr Paul facetiously remarked that' perhaps the Chairman might point out the desirability of the works being completed. Mr King replied that he might refer the bondholders to the member for New Plymouth. , A .member thought that it would be a capital idea. Mr King pointed out that the bondholders* were treating the Board most considerately in this matter of default, as they clearly saAv that the Government were to blame for the existing state of affairs. The Board would have to think their position over carefully b'efpre they replied to the letters, and therefore he considered the matter should be carefully thought out before any reply was sent. Mr Corkill moved " That the Chairman be requested to prepare a suitable reply to the letter of Mr Walter Busby, also to write to Mr Daniel de Pass, as Chairman of the Bondholders' Committee; the Board to meet again on.. Wednesday next for the purpose of considering and confirming j such correspondence previous to its despatch by the outgoing 'Frisco mail." Seconded by Mr Connect, and carried.