WANGANUI LOANS
PRESENT MAYOR’S WORK REPLIES TO HIS OPPONENT Mr. Hogan's criticism of the Wanganui City Council's renewal of loans policy was replied to by the Mayor (Mr. N. G. Armstrong), at Wanganui East last night. “Mr. Hogan had mentioned what the Harbour Board had done,” said tiie Mayor. “The Harbour Board re ccived authority to raise £40,000, and is now trying to obtain £19,600 of that amount. So far it has raised £14,50; at 51 per cent, for 10 years. When Mr. Hogan referred to what the City Council had done he did not mention that it had raised £54,000 m New Zealand at 5f and 5$ per cent, at par, which will receive any benefit the Government conversion scheme may confer. He merely criticises the council on the amount raised in L0nd0n—£121,475. If we had raised that j amount in New Zealand it would have meant sending out of the country a largo amount of money when every encouragement should be given to keep money in New Zealand. In addition, it would have cost £12,250 in exchange to send the money Home, plus about £2OOO to raise it. ” Regarding Mr. Hogan's comparison of the effort of the Harbour Board with regard to the money due on the Kaione to the British Admiralty, and the City Council’s work, Mr. Armstrong said that the two matters were very different. The Harbour Board had been dealing with a definite body, the Admiralty. It was easy to get them “over the table” and negotiate,, but the City Council had to deal with debenture holders who were not known except through their own banks. Wellington City Council had gone to their debenture holders. So had Nelson, with the result that they had got 50 per cent, of the loans renewed. That left them with 50 per cent, to raise in New Zealand,«, or let the banks carry them oii4k)verdraft until some arrangement could be made. And what a difference there was »n the amount handled by the Harbour Board and the City Council in Wanganui. The City Council would have had to lean on the banks for £60,000 and he doubted whether they' would have got it. The Harbour Board had to deal with onlv £14,000. Mr. Armstrong said that it was quite right that the City Council should apply the profit made on exchange with Australia as a set-off against the cost of the loan raised in London. Tin was the position. It cost £9500 to raise the loan. A sum of £B5OO had been made in profit, leaving £lOOO to find. “As there was a gas works loan in the amount renewed in London, the council will place £5OO of that £lOOO against the gas department, which wi’l mean that the cost of raising the loan will be £5OO on the rates,” said th' 1 Mayor. Mr. Armstrong then dealt with Mr. Hogan’s contention that the council should have fought the Local Bodies Loans Board harder regarding the reduction of sinking fund. The board had set 4J per cent, first of all. Usually they would not see people, but. after an interview with the Prime Minister, the City Council representatives, the Mayor and engineer had been allowed in. They discussed the matter with the board for three hours. The most important point raised by the board was the life of the tram ways. The bulk of the loan affected the trams. Mr. Armstrong dealt with the financial side of the matter and Mr. Deem had to put up a big fight on the technical side. “The policy of the board is that the amount of the loan should be re-paid during the life of the asset,” said Mr. Armstrong, “and t' is the difference between the Cd Council and the Harbour Board. The council was dealing with an old tramway service and the Harbour Boar i was dealing with money for new wor —the harbour moles, assets that would have a longer life.” The City Council representatives got the sinking fund reduced to 3 percent, from 41.
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Bibliographic details
Wanganui Chronicle, Volume 76, Issue 97, 27 April 1933, Page 6
Word Count
676WANGANUI LOANS Wanganui Chronicle, Volume 76, Issue 97, 27 April 1933, Page 6
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