HARBOUR EXTENSION.

Taranaki Daily News, Volume XXXXV, Issue 81, 3 April 1903, Page 2

HARBOUR EXTENSION.

TO THE EDITOR. Sib,—As the matter of tho harbour extension is a'.t< acting a good deal of attention at present, it se-ms to me that this is a favourable 'imu for laying before the public a scheme which will enable the Harbour Boa;d to carry out the Harbour extension and improvements as sugg stad by Mr Marchant and Mr Napier Ball. I propos' to show that th-si improvements can be made, not only without increasing the annual burden of the ratepayers, but by actually decreasing this burden. I will show that for a considerable time, if not altogether, there will be n. necessity for levying any rate whatever. The scheme is on much the same lines as that suggested by m u over four years ago, but with tome modifications What I propose is:

To raise a loan of £300,000 on detru tures at 3| per cent-, whioh I believe can be floated at pis-, and also to appropriate the pinking fund at present in the hands of the sinking fund Commissioners, and out of these funds to pay off the present loin of .£200,000. Ths position of this loan is this: • £43,050 worth of the debentures are in the hands of the sinking fund Commissioners, and £157,000 of th>m are held by other persons. It would be necessary, therefore, for the Harbour Board to arrange terms of pay meat with these outside debenture holders These debentures are due and payable in six years from May next, and another year will expire before the Harbour Board .will be able to obtain

the necessary legislative authority to obtain tha proposed loan of £300,000, 'and to appropriate the linking fund, therefore these debsmtures wculd only by that time have five ytars currency before they become ptyable. I taks it that these debenture holders, bein? perfectly satisfied with the soundness of their security, as evidenced by the very high premium at which the debentures stand, would accept 3£ per cint debentures on the same security, and a cash premium of about 10 per cen% which is almost equivalent to full payment of principal and interest, in | lieu of their present debentures. | Besides the £43,050 in the hands of the sinking fuud commissioners, there is also a sum of £2,934 on the sicking

fund in their hands. Add these and fbe year's accumulated interest on the £45,050 debentures at 6 per cent and you have about £49,000 in additic n to the £300,000 now proposed to b.< raised. After piying then, the debsnturholders £157,000 and 10 per cent bonus of £15,700, totalling £172,700, and cancelling the £43,050 at par, you have in hand the balance of the loin,] £127,300 and the £6OOO accumulated sinking fund, making a total of £133,300 for carrying on the extension and improvement works. The cost of rioating the loan I estimate at about £3OOO, and this sum can be taken out of the annual surplus which the Board acknowledges it Ins of £3OOO. Now the question arises: Oould tbis loan be floated at par ? I contend that it could, because the security offered is a splendid one, and is known to financier nnd recognised by them and the detnnture holders as being really good and sound. Their perfect confidence

in it being shown by their not being willing to part with these debentures at a panny less than their full value, proving that the debenture holdera do not consider that there is any weakness in the security. Further, the security is one that is improving overy year both iu ra'eabla area and rateable value, aud the harbour dues and all other revenues of the Board are also showing in increase, except the land revenue which, however, is not likely to decrease, inasmuch as thtre is a great deal of Grown land sull to be sold, and a large portion of the revenue is from Grown rents, which are permanent. will now rvoceed to show how the annual interest on this loan can be met

and tbe burden of the ratepayers lessoned. First of all you will notice that the interest on the £300,000 at 3£ per cent, is only £10,500, while the interest on the present loan is £12,000. If my scheme is given eflect to there will thus be at once an annual saving of £ISOO. To meet then this annual charge of £10,500, there will be the Board's acknowledged sui plus of £3OOO a year out of harbour dues and port charges, etc., and say £4OOO land revenue, the average land revenue for the last six years being £5425, but, inasmuch as the last year's was only £3600,1 put it at the low average of £4OOO a year, which, I think, will be undoub edly maintained, if not exceeded. The £133,300 balance of the proposed loan, I take it, the Bard will sp ind at the rate of about £20,000 a year, and in the meantime this money will, of course, be deposited in the bank at.' interest on a fixed deposit at the rate of 3 per ce< t. Now this will produce for the first; £4OOO. Thus you will see the'e is ecough to meet the interest of £10,500 without levying any rate, at»d leave a ; surplus of £SOO.

Of course for the nexfi year there will be interest on only .£113,300 at 3 per cant,, which will produce £3400, bus this, with last year's surplus of £SOO, and the Board's annu.il snrp'us tf £3OOO and the land revenue of £4OOO, gives .£10,900 to meet the interest of £10,500, still leaving a surplus of £4OO without striking any rate. Now, as the interest on the deposited money decreases, the harbour improvemeats will be extended, and, no doubt, the trade and commerce of the port will at tbe same time ba increasing, and there is little doubt but that there will be considerable swiug in dredging operations as the work extends; si that J iihii k we cm fairly and leas.UHbly ussuaiii tint with rhe money saved in dredging ths increased harbour and pimsengeidußS—which during the last five years have increased at the rate of about

£250 a year, and this will probably be more than maintained—arid with the increased rents from tha Harbour Reserves, which are likely ere long to be considerable, we may, an I said before, assume there will s:ill be sufficient to me«t the interest on tha loan without striking a rate. The amount borrowed, however, is not quite Huffki'<nt to carry out the suggested harbour extension and improvements which are estim/iwd at about £140,000, but I thiuk taat. by the timo the whole of the £133,300 is expended, the board will tee its way, with the assistance of surplus revenues, and possibly a small overdiaft, to carry out and complete the improvement works. With such a prospect before us ns I have sketched out, the people of this provincial distriot should not hositato,

but at ODca urge the Harbour Board to obtain the necessary legislative authority to caivy out a echeme such as I have tuggfested. I am, etc. Arthur Standuh. New Plyraou'b, April 2nd, 1903.