POWER SCHEME.

Taranaki Daily News, 18 June 1921, Page 4

POWER SCHEME.

A TEMPORARY STOPPAGE RESULT OF FINANCIAL STRINGENCY. FORTY MEN WILL BE IDLE. 'All. available financial sources having been tried without satisfactory result, the New Plymouth Borough Council has decided, owing to the inability to secure loan moneys, to temporarily close down the hydro-electric works, other than contracts already let. This step was taken after a meeting of the council held in camera on Thursday night, and the announcement was made available for publication yesterday. The resolution has to be confirmed at Monday night’s meeting of the council. At the meeting of the council the Mayor (Mr. F. E. Wilson) and there were also present: Ora. T. N t Blackhall, E. Dingle, V. Griffith*, J. Kib< by, R. A. Large, R. L. Parkin and W.| Rumball. A letter was received from the Stats Advances Office with reference to th 4 proposed State guaranteed loan of £60. 1 000 for hydro-electric extensions, and stating that with regard to the sinking fund as the law stood at present before the guarantee could be given the Min-> ister of Finance had to be satisfied that the amount payable into the sinking fund was sufficient for the repayment of the loan on the due date. State guaranteed loans were limited to a term not exceeding 33 years, and to keep the amount of the special rate forming the security for the loan as low as possible it was suggested that application bt made for authority to increase the term accordingly. • Then when it was ascertained what amount was payable on account of interest and sinking fund, flection 22 of the Local Bodies Loans Act, 1913, could be applied, and the rate increased as required.

HIGH INTEREST NECESSARY. . The manager of the New Plymouth < branch of the Bank of New Zealand wrote with reference to the hydro-e’*c-tric loan of £72,000, and stating jthat head office had advised that it would be quite useless endeavoring to sell the debentures on. a 6 per cent, basis, and that they were awaiting further advices in the matter before circularising branches. They quoted recent sales in the open market of two parcels of Wellington City Council debentures of £5OOO and £l7OO at a price returning £7 14s Id per cent., maturing September 1, 1929. According to their tables the borough debentures would require to be sold at £B5 per £lOO, so as to produce, say, 7J per cent, to the purchaser. In view of these fkets the council decided, after a lengthy discussion, to temporarily close down the hydro works; also that the resident engineer be instructed to take immediate steps to secure the works, and that when thia has been done the work cease and all men be paid off. It was further resolved that the general manager approach such institutions as he deemed advisable to ascertain whether and on what terms the £60,000 could be floated, and that in the event of there being any probability of business eventuating. His Worship *ne Mayor be authorised to decide the qnes* tion of a deputation to Wellington, or Auckland ae the case may be. The State Advances Office will be in* formed .that the council cannot see its way at present to extend the period of the currency of the £60,000 loan. THE EFFECT OF STOPPAGE.

It will be noted that the council’s resolution includes a direction to the engineer to secure the existing works, and after this the men will be dischai'ged. There are about 40 employees at Ma< ngorei, and all these will be thrown out of work, swelling the ranks of the unemployed. The work on No. 1 tunnel, which is under private contract, will not be affected. The effects of any lengthy stoppage will be widespread, as the worlds under construction, will no doubt suffer by deterioration, necessitating further labor to restore them when the works are recommenced. The amount of money spent on the hydro-electric scheme by (the council up to date is in the vicinity of £90,000, and during the idleness interest on this money will have to be found out of the general revenue. As hinted by the Mayor at a meeting of the council sometime ago, this will mean that there will be little available for ordinary streets expenditure. The necessity for the pushing on of the works is frequently brought be* fore the council. The electrical engireef recently stated that applications foi lighting were coming in at the rate ol about seventy per month, and even undei most favorable circumstances as regards the present plant, he stated that only about six months would need to elapu before he would have to advise th< council to accept no more. Applications for heating and power, of course, hav< not been accepted for some time past, owing to the pressure on the council’i present plant.