WILL NOT CONVERT.

Star (Christchurch), Volume LXIV, Issue 740, 19 April 1933, Page 7

WILL NOT CONVERT.

Harbour Board Discusses its Loans. SPECIAL MEETING HELD. A special meeting of the Lyttelton Harbour Board was held this morning to consider the question of the conversion of the board's loans. It was decided that the loans should be allowed to stand as at present for their full authorised term with merely a 20 per cent reduction in interest rates as allowed by legislation. This decision was come to on the motion of Mr F. Sutton, seconded by Mr J. W. Bowden. The chairman (Mr W. T. Lester), in a report stated that the intention of Parliament in framing the legislation was to secure a general reduction of interest throughout New Zealand and thereby to give relief to public bodies and to ratepayers where that relief was needed. No doubt Parliament also had in mind that the Act would be an offset to the increase in the exchange rate to 25 per cent. Fortunately the board was unaffected by the latter, except in its oversea purchases, and from the figures .supplied by the secretary the saving in their interest bill was not such as could easily be applied to reduction of dues and charges. A question which had an important bearing on the conversion of the board’s loans was the effect of conversion on the market value of their debentures and the interest of the debenture-holders therein. The Act gave full power to local bodies to apply merely the 20 per cent reduction of interest payable under their existing debentures. This would give the banks which cashed the interest coupons some extra work, but there was no indication that the banks would raise any objection thereto in the case of the many local bodies who would prefer to carry on with the 20 per cent reduction.