POWER BOARD LOANS.

Star (Christchurch), Issue 16705, 10 April 1922, Page 4

POWER BOARD LOANS.

NO MORE GUARANTEES. GOVERNMENT’S DECISION. A request for a Government guaran tee for loans raised abroad by power Hoards was made by representatives of the. IVanganui-Rangitikoi Horov henna. Dannevirke. Manawatu-Oroua and Tararua Power Boards, which waited on the. Prime Minister and the Minister of Public "Works in "Wellington. Mr Massey said h© could not do this. Mr J. A, Nash, ALP., who. with Air M. H. Field, M.P., headed the delegates, said that the deputation was the outcome of a conference held at Palmerston North « fortnight ago. He estimated that the boards represented were going to require about £1,000.000 within the next two years or so for the reticulation of their districts and the other works connected with t] ie distribution aud utilisation of the Mangahao power. The Minister of Pnblio Works had stated that the Government would he ready to supply th© power at the end

of 1923, and if that were so it was highly important that tho districts should make their preparations without delay. The hoards wanted to know what the power was going to cost them, and they wished to suggest that the Government should undertake to raise the money they required on the London market. If the boards had to go direct to the London market they would not g©t such good terms ns the Government could get. If the Government could not borrow the money itself, and hand it on to the boards, would it give their loan th© State guarantee?

Air Massey : I cannot do it. Mr Nash: Th© Thames Power Board had the State guarantee. Mr Massey: That was* some time ago. I can tell you all about it.

Air Nash said Hint the boards were very active at present. They were appointing their engineers and preparing to proceed with their works, but they wanted the assistance of the Government in getting their money on the best possible terms. They were aware that the money could not be borrowed locally. 'They asked, also, if the Public Works Department would give them the assistance of its organisation in the purchase of poles and other supplies.

Mr Field said that in his district the people were most anxious to proceed with th© scheme, and they must raise money if they were to be ready to taJ?e the power from th© Government at the end of next year. Tie hoped that even if tb© guarantee could nob be given, th© Government would lie behind the boards in some way. Th© boards were working together because they believed they would be able to get better terms in combination.

Members of th© deputation emphasised the points mad© by the two members. They said that the existing legislation did not permit a group of boards to rniso a combined loan. They suggested the amendment of the legislation on this point. Th© Minister of Public. Works (th© Hon J. G. Coates) said the Government had intended to propose such au amendment during the recent session of Parliament-, but in tho rush of other work tli© matter had not received attention. He did not know that an amendment was really necessary. Several boards, could place their loan business in the hands of one agent in London.

Mr Nash replied that better terms could be obtained if tbo boards were able to offer security over a combined district.

The Prime Minister, in reply, said he wanted the members of the deputation to realm© thßt. when they asked him to find their money for them they were asking him to find all the money required by the power boards throughout New Zealand. He could not assist one board and not another. Just, what their total requirements would amount to he could not say, but probably the power boards of the Dominion wtwild require a sum of not less than £20.000.000.

1 may just ns well telL you plainly Hint it is quite impossible for the Government to borrow the money for you or to guarantee* the. loans,” said Mr Massey. “It is true that Southland and the Thames Valley got the Government guarantee behind the loans that they ro.isod in Txmdon. But when T went to London last year and met the representatives of the Stock Exchange they asked me about these guarantees. T told them the position, and they informed me that the use of the Government guarantee in this way vras going --• • f

to ruin tli« credit of the- Dominion of 2sew Zealand and make the Government pay a higher rate of interest for the money borrowed for national purposes. They said that as promises had been made they would not stand in the way of the Southland and Thames loans, and those districts got their money. But the effect of raising all the money required bv the power boards with the assistance of the Government guarantee would be to jnjure our credit seriously.” Mr Massey added that ho liked the idea of combination among the boards. They would get. bettor results if they worked together than if they stood apart. The Government would give the boards what assistance it could it they decided to go to the Don don money market. It would allow them to make use of the Government’s organisation in London. He did not doubt that thev would be able to get the money. The Auckland City Council had for the State guarantee, and he had been compelled to reply that the national credit would be injured il the guarantee was used in the way that had been contemplated. But Auckland tad still raised its money without difficulty. and on very good terms, though not quite such good terms as the Government could get. Much depended upon going about the business in the light way. Mistakes had been made in some instances and difficulties had been caused. Money certainly was becoming more plentiful. If an amendment of the Act was necessary to enable the boards to combine in borrowing money abroad, lie would put the amendment before Parliament early nest session. There need be no delay. Mr Nash said that the board would he tied right up if they did not get the money quickly. Mr Coates: There are people in Wellington to-day who are prepared to undertake the financing of the whole thing. You have to watch the prices, but there is competition for the business that you have got. The Prime Minister confirmed this statement, and the Minister of Public Works added that the people he had in mind were prepared to finance the operations or to take contracts for carying out the reticulation. They were looking for the business. Mr Nash: 1 had an offer from Auckland to carry' out the whole of the reticulation. The Minister of Public Works added that his department would be prepared to assist the power boards in the purchase of supplies on a business basis. It could not spare them the services of officers, but they would he allowed to make use of its buying organisation. He wag very glad to hear that the board a were moving. He had been afraid that they would not. be ready Ij tak<? the power.