THE OAMARU HARBOUR LOAN.

Dominion, Volume 3, Issue 923, 16 September 1910, Page 6

THE OAMARU HARBOUR LOAN.

''•VERY UNFORTUNATE BUSINESS.'

EVIDENCE BEFORE' PARLIAMENTARY COMMITTEE. 'n " '

' PROPOSED COMPROMISE DIS-' CUSSED. -. For some days a Select: Parliamentary Committ'e-3 has"/ been '*-' taking . evidence 'in . regard to. the Oamaru Harbour- Board Enabling, Bill'which proposes io give : ef--J:'::;! feet"to a suggested compromise ih;respect . of a loan for;JSIOO.COOjby tho payment '-. to - the bondholders of £47,000 in cash. . iThe Hon.. T. W. Hislop, representing " the . agents .for.: the. Bill and the Oamaru r / Harbour Board, produced debentures that ,V were issued under' the- various loans. The first loan was for .£IOO,OOO, of which :-,v i235,000-,was - advanced by,:the-Government : 7?■: sand. 65,000floated'iin - London. That -.was the iSii'-loah. :,',Of: that loan there,-was-a sum, still owing, but the interest had all lipen' paid. Tho' ,£IOO,OOO loan' under tho : s : V l Act.:''of--187?'--'was''' : floal'ed''-:by' this 'Union' S:'-•! Bankand! was/ mainly held ; in London. There were, a' fewVbonas held in, Now: Hear . .'land. .The' sum' mentioned "in .the Bill *!.* '.was owing for principal.• The sum of ' ; : ! -.'--^7000,. , was- paid -ofif * : the and . - JEl6,6oo'was paid off. the ,£65,000 portion ',;i, 'offthe,first;,lo'a'n..-A receiver had -been l:,: appointed ?iri '1894. ,Tho bondholders' had' :!:" ' received part !6f : . the since.then. ; Theyinferest, account; was : ;in ar- .... , 'was np to November, , 1909. :The)rej;eiy,er;',was|,;Mr..:Simpson,^of;Dun-; : A cdini" rind- : he "was: a'. psid : official/ The;. .;..;Katter.:had;bMn : rextremely. unsatisfactory all the .'time, and negotiations had' been ;-.going" oh :-between- the,- ..debenture-holders . - -.and tho. board which : had' ; culminated; in the of. TKe.bond- ; .: holders in ;London,reprGSGnted:a.;Sum.!of about,- Soino iin: ; cohsonti (y 'Tvas : ;'represehted^V in ,! /It'.twas; difficult to. find' out the ;whercabouts of all, tho: holders, but every effort .had : ; :;':-;!l)een:-miade;.;;>":;;■''-v '0 Mr. Hanan: Have tho trustees -of anj ; ... estates been coinniuliicated with? ' .

/ 'Mr. Hislop: ; .They'' have no power: to ■Xi'jiMmproriiis6..vof;/claim,-'-.;.l)ut they do not /'/ 'If; :the /Bill: pa^s: it ::will / be; ///j/nhriecessary/ for: -them/: tb';;app.ly";':tp'/..th6 ' Court' for consent. .' • - •:/" ? / :':; itf:' !^.:&ntiiimjigj.'; : .'•'aid; that . the. // "toardiiinsfead'of giving debentures fot : ' r i ;/'-jKO,DOO :as ?was';first; suggested; .elected , to. .' give .jS'I7,OOO in cash .m redemption of • the.'.lbau. ;If ■' the: Bill- was not agreed to " the debenture-holders would go on as at ' jresent getting. 110 .interest. . " • ■' - '.Mr. Graham: They are m a sense forced •• -fo take-what they, can.,; " y/./;: J// /: Mr. Hislop- Yes. . • Mr. Graham:. The total amouiit .of. this /" have:/had;: no. V interest' since •; The -arrears/ if - all-; i:v':4he.*iin€eHfest?: Had-';bee«£- paid,'/'wouldhave' ■>' been for / which.. they are - willing. ' to! accept .£17,000.. . . V.' f • .-./ Mr. Hislop:'Yes. . •: ' Mr.'! Graham • Do 'you-think l the district

* (ought: to. be 'rated? . : •!-,." Mk'-Hislop: Yes ; L proposed- something, ilike/thatz/somei time iag6.';The;..b'usiriess . ..: of-the-porty' lie added; had.decreased .and . had : practically, been /destroyed by the I v; Will: it '.Hurt the .Credit of Board or,; Country? .'■! Mr. Graham: Do'j'ou think it.'is likely : to hurt the'credit, of the Harbour Board ? v. Mr.. Hislop:,-.1 do.'riot think so, but !/!/■■ if •:■ theri/has/beeh' ariy/ ; discredit/attached;' 'WK to: the : board 'it' has been, so for.' the /last;, sixteen!: :c -yeai:B; >"' - Graham-VWould any, discredit'.ttt-y • tacli.to'.'the:colony? :, '• -"•://-/ Mr. '-Hislbp: / N0.:.: The:..debentures.; have '"■■■ expressed upon them that there is no lia-. bilit.v attached to- the. color.y. If that '-which''/is:-'''moftgag^d.;:'won't::.produc<r,';thp i r :-:\*riccessary. : furitis:there is«,nobbdy/to;.blame, j -i for. the .lender :has- got. all' he. bargained '/' for. .It is,a very unfortunate business. //S > It'woUld' > have;paid:Oamani i :to!hayi: f madef 5 atrithb^tinie: that v default: ./ -was iminiuent and ;to l.haVe dono'sonlG-/ 'M:. rthing;:. ? 'Av^/vM;'i/v.:. . /fMr.: G.raha:m '.'Have'. yovi .ever -suggested;.; w//or;has/anySuggestion': beeii/madeJ:to'Mave!: --/Jtliis'/dbiie'■ -V-'Vv'r Thire: was some at•/teihpt • made. 'I • protested/ against' the :/ ! ' Tailway : policy,, and '; in .''1889:: and 1890 1. >v- tried to.get a Consolidation Bill through. : : ■;/ '/"Jlr"."Buxton:i'l/:would; like j;to ; know. the,.original, bondholders;are;.the; C people -/ivlib ripw - hold the ".bonds.; IV un-; v; :,: serstand : /that' a."great:: many ; have Wen' ; sold and I uridetstand..that,Bpiiie. of; them. , have : beeri sold ■ as' low as i£l3. .. - . ; Mr.;Hislop: Yes! / ;;.,- * Mr.-- Buxton: /You. are;,of :■ the. .opinion. ' fthat the position is that whatever dani/'V'age could be done tbvthe.credit,of,-Oamaiu: •, : 'and to the credit of ";the: colony has al- ;: :ready becii done/ and that there would be more, serious;,(lamageVdohb::byVaccept-: ; iirig'this in':place/^f.;th^;^lott,ooo /;S\;. . Mr.. Hislop:.'.Yes:. " :'/ ' •. ' . ' " '. Mr., Hislop. added, in reply to - - other questions, that the amount of the .cotn- :. / -promise >would : bo ,^£47,000,. plus .intGrest : ;/y! : . /there was/anything in tlie;. Bill /-'to':say: . ' '/ vr'hafc would be done' with any ..

'A Helpless' Loan. . R. Milligan,. chairman of' tho board, - . gave evidence regarding tho loans.and the , >4 proposals 'for-compromise', with .the,' bond-. ; folders. • Altogether . .2137,000 ...would bo ' :*. ; -required'to, repay the balance of the 387(3. "I- }oan' : and' 'to''c'arry- but -the , agreement; en-; tcre'd into. with tlie Bondholders' Commit-•tee'plus-.all'expenses.':'Otherjloans and : ;S J cbiirgesdetailed .-/would.; : which gave <£225,000 in.', all. ..Tho: proposal -\ regarding' tlie compromise for tho, 1879 -loanoriginated with; the bondholders.-The,-S": board informed' the receiver- that - tliey ; H: thought -th'G.'ratbpayers* would ..consent;tb: ;; i pay'.:^2s,doo:'' ; ''.The.-. , Boh'dholdersf-. Commit-; . tee cabled making a-firm offer to. accept =..'r'--j850,000' 'of : 4 per.' .cent "bonds, properly secured?in payment ot,,principal, -and ln-,• y. ;;tcrest.K:Tho;-reason:,the 'position :;.'of ; th^ loan appeared helpless was - because . the' - '•,& revenues ■ of .'the board , for -many, years; not : 'b4 (sufficient; to repay. : the .first mortgage—say, for.'-35 40 years. The ;;;'';bbard'Conten'Qed4hatHhe compro,iriiss;was -&ent from the propos'al.' Tho railway pol-" .*icy: had contributed- to'.'the board's Tops ' of revenue." . The .proposed rate .was rea- , 'sonable under tho circumstßnMSi' though '/ higher, than ,in any. other'piirt:.'of 'th'ftl Dp- : :;differencb,:; ' tlie '/' j£137,000 and' tho full 'amount, was .£BB,OOO, A-;^Tates:Vi : ;.. - ; 1 ; : Position of the - Sottlers."'.' *.' •. y;%duis:.;DaslDr;;'.farmer,: - Toharaki,' : riear ~'i.Oamaru,; said 'that.lwhen tho, loans, were .' required by big "; ;;estafes,''but:since/then' there; had'been a sgreat.deal.;of closer •• settlement':He"oalr .s;'•>':cula^^^that•^oi;■■ ; thb',;iating' loans of : ahd;' , xi7,ooo,, they ..were; ; paying in-;rat^.:fm;.'interest/and. sinking. ; ' to show, for it. Tho' board: wanted; another loan fpr the loan was . defeated, by three,-quarters of a vote. . Oamaru would never bo .able ",to make •>.;:ehbußh'-ievenie'''to;enaKle.- it to be made a liome pprt.-;. He';how\paid; a rate' of, d£6 v,'. lis.,. and\ under this,',Bill he would - have ' to pay. ft rate of. .£8 75., and , there . we're hundreds, of farmers like him.;' He held f ;.- that.;-this ; proposal:; should be 'held iii ; abeyance'because in, two 'years.'.-, time they *.- would'; see.-'whether,:dredging;: operations, :would be, a success to such an extent . : . ■/that: Some.: steameirs. could ■ be. ac'commo»: :- dated.. It would be time enough-then to ' ; see;, whether, the settlers should take this loan upon their shoulders. : "Not a Good Thing for the District." Mr.': Hankn :,'The. ratepayers "knew .when ::: ■ authorising'. subsequent, loans', that there . : were, previoua,.obligations?' ~ Witness: Yes. - ;. :Mr.'..; Hanan: I)o you not . think ' that % this compromise- would be a good thing for the district?. . • "Witness: No. ; . : . Mv. .Eaunn: And you could not make better •compromiMi?. , ; • ' ' .. '. .-Witness: No. In answer'to further questions, Mr. J)aslef said th« -<-*tia ruling required would only.be about another .£2IOO a year. The ilioard'i could not- out of preV ;. "(sent rating powers:"pay. anything to the "bondholders in question.., '• . Mr. Hanan: How; then, can they effect . this compromise without .extra rating - powers ? ... , - . ... ' Let them stop spending money 'on useless 'liedgijig, ' Mr. Dasler said tliut he did not sng-' ; gest' that the harbour should be closed .up. It should be kept open foi: coastal

. vessels.. The majority of the .people did iiotV approve iof .;tho,' Bill.'. 1 He -'suggested .that the original bondholders should get only, i per cent. In that caso the inter-, ait: could bu jitiid ml ol the present surplus., from rates. . - • . , : To Mr. Graham: The district was overrated, to. the extent of J!2<so. : . • Mr. Graham Bnid;hb'lutd no.doubt the board 'was, .acting ' illegally., in raising, more, than was sufficient' for the pur-' pose for which tho rale was levied. Tho 'Hon. 1\ W.-Hislop:' ll has been' ddolared,, by-the ( Suprerne; .Court ■ that it ils .quite;legal,:and. that. (he .rate .could not be'"lowered.';-" The'surplus has'to be spent in iinpfpvirig'.'.tho Aarbo'uiV-'t'to'. ' ....-,: Tp-.thd -Hon.-; Mr.. HWlop: :Heiagreed to! the: compromise ..with tho bondholders, .as proposed,and that ■ 'the should be. made responsible: for it,;, but only out of the/ surplus rates. ,now ,levied. The; surplus rates amounted now to <£36,000. l ; hat did not include the ,£9OOO in .the hands of. the Public ■ Trustee. ;;' ■ .Mr. Hislop: pointed out that if the, Bill did not pata tho district would lose the Whole ( .<if;,the saving- coincident to tho conversion oHhe loani;. etc:'.- ; "Kick Out the Bill!" ~ !-Alexander Hamilton! Chapman said he was there as chairman, pt' tho Ratepayers' : Defence -League to protest against jne passing of . the Bill, which: proposed -to - load : the.: ratepayers with ,£225,006. ■ i'he. Bill, hadV.'nfcve'r ' been advertised 1 in his ': district, at all.lt was not therefore' fair' to the settlers Thut should be... sufficient ' .to - mnkc ' l:he : committee ',- postpone. the Bill until , tho , settlerswere, made,'''.■.conversant- : with' : it.Th« Bill hniv ptoposed in makn tliii rktii payers, responsible for the repayment of a; capital,'of They , did not look upon this' as-a-light thing., . . The debt woujijl : keep,ithem-.land' their.'-'.'children! paying all. their lives, and if damage . ( were.;. : done„' to . tlie • breakwater, the pay--ment even extend to a third gen-, eratioii., The: ratepayers-, would pay'their own debts—eyerjr : pomiy of .principal and interest,;'though,it .would take : them a very ,lo^^tim«!io^db••'jt:'^< , irig- now for ,28-years, .and- thero' was still .£BB,OOO 'or , "tb'.lb'e°. .'jiaid .'off... ■ They: considered.. -'they, "enough now to, pay.'.theirVo.wh' debts!without undertaking/to pays the. debts - of-.the-Har-bour Board,!for': which.; they were "not 'responsible, either , legally or jnorally. Ed invited the - Committee - to throw out, the i)ill. at once. Perhaps -they should , not : touch '.it with . their hands,-'.in ease it: 'should ..'soil them. ..Let: them., kick it 'out "with jtheir :V f6ot.' . .-

■ Against Further ' Rating Powers. ■'• ! Th6"(&st'idansexpended: very: fooHshly.in'.building: a. har-.ibour';-inV- shallow water. :. To > ( » .limited' 'extent it is\lienefieial to the' district. .He .would not give : the. Aboard" any further rating powers. ' . it, Mr. Hanan:. Do you think /this/ com-: /promise! is to/ thjei credit of. .the district? i;>/Witness: ! 'l(/don't./wantijto'vexpress -an opinion.' /That /is ..not .'a-, ratepayer's busi-' V-v.',-;

v^To/'Mr: f'Gralidm'r'ViThc;-Harbour ■■Board should I 'not .' have . borrbw:i?(l':money- that/it could , not;' pay.'.';, It, had , Th»( l opposition':- to -. the . Bill was very Buong. -. .. .. * :■ '/iV;'- : /.. Further sittings// wllh.be /held.'.before the ;Committea/.;submits : it's' report.