LOAN MONEY NOT AVAILABLE

Timaru Herald, Volume CXLVI, Issue 21324, 19 April 1939, Page 6

LOAN MONEY NOT AVAILABLE

Work On New Wharf

to Cease

Fifty Men Receive Notice

of Dismissal

B; Telegraph—Press Association

AUCKLAND. April 18.

Because it has been unable to obtain loan moneys for capital works at the Government prescribed interest rate of 31 per cent., the Auckland Harbour Boarc decided at a meeting to discontinue work on the new export wharf which is being constructed off the eastern reclamation adjacent to the export stores being built by the Auckland Farmers' Freezing Company, Limned. Between 150 and 200 men are at present employed on the work. Of these 50 will be dispensed with on Friday, and the services of the others will be gradually terminated after that date unless financial relief is obtained.

The decision to conclude operations was made on the recommendation of the superintendent, Mr D. Holderness, who submitted a report on the subject which was adopted.

Superintendent's Report

Mr Holderness said that the Minister of Finance had promised to advise the Board of the Government’s intentions in the matter not later than April 8, but no communication had come to hand. A telephone inquiry to the Treasury on April 6 elicited the information that the matter had not at that date been dealt with by the Minister, and that although it was regarded as urgent it would still be some time before a reply could be expected.” Mr Ashwin (of the Treasury), again urged that the Board should continue the prosecution of its works as he was confident that a solution would shortly be found by the Government,” Mr Holderness added. “I consider, however, that it would be unwise to continue at the present rate of expenditure on capital works without a more definite assurance that the necessary loan moneys w’ill be available to enable the Board to meet its committments.” Mr Holderness added that if the Board accepted his view he proposed immediately to curtail expenditure heavily on the export wharf and breastwork with a view to closing down this and other loan works completely if an early assurance in regard to finance was not forthcoming. The proposal would, unfortunately, involve immediate dismissals, but only in that way could the heavy rate of expenditure be reduced. Unless early relief was given the dismissal cf further men would be inevitable.

The Board adopted the report and decided to notify the Minister of Finance accordingly. There was no discussion.

A Serious Position

“This matter has been exercising the minds of board members for some considerable time,” said the chairman, Mr W. B. Darlow, in a subsequent interview. The board had been in communication with Mr Nash on several occasions, and he himself had made several trips to Wellington in the matter. The estimated cost of the wharf was £500,000 and up to the present the board had spent approximately £lOO,OOO. The remainder of the money to complete the contract was not in sight at the rate of interest permitted by the Local Government

Loans Board. “As the public realise, the Board, along with all other local bodies, is not permitted to raise money at a higher rate than 3J per cent,” he added. “Although debentures of the Auckland Harbour Board have been sought after prior to any other securities in New Zealand, at this low rate the board has been unsuccessful in raising the necessary finance. In discussing the seriousness of the position with Mr Nash. Mr Darlow said he had pointed out that the Board would probably be able to raise the money if the rate was raised, but that it would naturally prefer the Government to provide the amount required at 31 per cent. He had emphasised that the board had to have money and must see where the whole amount wts coming from, otherwise he would haxe no alternative than to recommend the stoppage of the work. All realised the seriousness of that step, Mr Darlow added. It was serious from the point of view of Auckland, but there was no alternative.