POWER AND MONEY

Dominion, Volume 14, Issue 101, 22 January 1921, Page 8

POWER AND MONEY

AN APPEAL FROM NEW PLYMOUTH INCREASED INTEREST WANTED ENGLISH ENGINEER’S OFFER A request for permission to pay 6 per cent, for loan money required for the development of hydro-electric power was placed before the Minister of Finance (Mr. Massey) yesterday morning by the Mayor and the Deputy-Mayor pf New Plymouth (Messrs. Bellringer and Hill). The head of the Treasury, Colonel G. F. C. Campbell, was present. The members of the deputation explained that the New Plymouth Borough Council, with the consent of the ratepayers, had undertaken necessary extensions of the existing hydro-electric plant. The present plant was heavily over-loaded, and was unable to supply all the power that was required. The council had entered into an agreement to supply Inglewood with power, and it had received applications from other centres in Taranaki. A sum of about .£60,000 had heen spent on the extensions, but the council found itself unable now to raise .the rest of the money at 5J per cent., the maximum rate of interest allowed by the Order-in-Council. It had done its best to attract investors. Mr. Massey: I admired your advertisements. The borough representatives added that, the Auckland Harbour Board and some other bodies had been allowed to pay an increased rate of interest. The money could not be borrowed at 5J per cent, in New Zealand, and they did not think that it could bo raised abroad They emphasised the importance of hydro-electric power, and referred to the utterances of Ministers on the subject. Mr. Massey said there was no need to stress that point. They were all agreed that the power was important, but. the question was one of ways and means. Colonel Campbell asked how the Borough Council had come to commit itself so heavily without having the money in hand. Mr. Bellringer replied that the workhad been proceeding for over a year. It was part of a very large scheme, and the council had to make its arrangements in advance. The original estimate had been £172,606. but it was seen now that the cost of the works would be nearly .6160.000. The council was seeking the additional money to complete the works. Colonel Campbell stated that the Government had not allowed an increase in the rate of interest except in cases where maturing loans had to be met. "Would it be fair to pay a higher rate of interest than the ratenayers had.authorised? Mr. Bellringer replied that the Government itself had recognised that money could not be raised by local bodies at 5J per cent., and it had taken power by legislation to authorise the increase of the rate. Mr. Massey: It has only been done in cases where loans were maturing, or where machinery and plant had been ordered and had to be paid for. Mr. Bellringer: That is partly our position. "We ordered machinery a considerable time ago, and it ought to be arriving within the next few mondis. The borough, said the Mayor, was threatened with a complete breakdown of the plant owing to the heavy overloading, and it was unable to supply power that was urgently needed. Mr. Massey: “You are in the same position as a dozen other places in New Zealand, and what we do for one we must do for the others. It ia the duty of the Government to keep the rates of interest down.” Mr. Massey added that if the Government permitted it, the rate of interest would go up to 8 or 9 per cent. Mr. Bellringer said that the New 1 lymouth scheme was really part of the big Government scheme. The Government had insisted upon the right <o take half the power that was to be developed, and had inserted in the Order-in-Council a provision that the ■work must b© completed within three years from July, 1920. Colonel Campbell stated' that while he was in England recently he had been approached by a prominent engineer who was very anxious to take over the New Plymouth hydro-electric works and spend a lot of money in order to develop the ironsand deposits. Had the borough council been in communication with this engineer? Mr. Bellringer: Ho wanted 10,000 horse power continuously. We are not developing that amount of power. Our scheme was too small for him. He wanted the power at a low rate fixed by himself. Colonel Campbell: He told me that b» believed it would be many years before the big schemes in New Zealand wera completed. He was prepared himself io find the money to provide all the power that New Plymouth required, his special object being the development of the ironsand. ' Mr. Massey remarked that ths firm with which this engineer was connected was a. very good firm. Colonel Campbell: Thoroughly good. Ho would give you all the power you want for everything. Mr. : Our scheme cannot stop and wo cannot provide him with tho power he wants. Mr. Massey: He put it to me the other way, that he would develop the power and supply you. Mr. Bellringer: We hare partly completed our works already. Wo offered to give him 4000 horse-power ou a certain restricted load. Colonel Campbell; He wants to do it the other way, to provide the power himself and let you have what you want. Mr. Bellringer: That would mean letting him take over our works. That might be a matter for future consideration, but we cannot go into a matter of that kind at the present stage. We are extending our existing works to provide power that the district requires, and we have the operations partially completed. Mr. Massey, after some further discussion, said that ho would talk over the proposal with Colonel Campbell. The position really was quite simple. There was merely a limited amount of money available for all the works iu New Zealand, and there was not enough money, material, or labour to go round. If one local body were allowed to rush in ahead of the others it would get more than its share of the available money. Mr. Bellringer: Our material is largely on order, and our labour is actually ou the job. We have enough labour. Colonel Campbell said that as head of the Treasury he had to tell the Prime Minister that'it was necessary to go very slowly in view of the requests for support that were being receji ed from many quarters. He offered to show the Mayor «ome communications ho had received from Mr Leggatt, the engineer, who was willing to undertake tl.o New Plymouth SCheUl2 ' T Mr. Massey remarked that Mr. Leggatt was a member of a family known in New Zealand, and his firm was a strong one. The members of ’th* deputation mentioned also their 'borough’s need of money to pay for three new tiamcars, now on order. The borough tramways were gravely handicapped at present by lack of rolling stock. Mr. Massey promised that all the points would be taken into consideration.