LOCAL BODY LOANS.

Taranaki Daily News, 11 April 1922, Page 5

LOCAL BODY LOANS.

NO STATE GUARANTEES. DAMAGING TO CREDIT. POWER BOARD REQUIREMENTS. Wellington, April 7. The Government guarantee will not be placed behind any loans that may be raised abroad by local bodies or power boards. This was made clear today by the Prime Minister in the coarse of his reply to representatives of the boards in the Manawatu district. Mr. Massey said that when they asked him to find their money for them they were asking him to find all the money required by the power boards throughout New Zealand. He could not assist one board and not another. Just what their total requirements would amount to he could not say, though probably the power boards of the Dominion would require a sum of not less than £-20,000,000.

“I may just as well tell yon plainly that it is quite impossible for the Government to borrow the money for you or to guarantee the loans,” said Mr. Massey. “It is true that Southland and the Thames Valley got the Government guarantee behind the loans that they raised in London, but when I went to London last year and met the representatives of the Stock Exchange they asked me about these guarantees. I told them the position and they informed me that the use of the Government guarantee in this way was going to ruin the credit of the Dominion of New Zealand and make the Government pay a higher rate of interest for the money borrowed for national purposes. They said that as promises had been made they would not stand in the way of the Southland and Thames loans, and those

districts got their money, but the effect df raising all the money required by the Power Boards with the assistance of the Government guarantee would be to injure our credit seriously.” The Prime Minister added that the Auckland City Council had asked for the State guarantee and he had been compelled to reply that the national credit would be injured if the guarantee was used in the way that had been contemplated. Auckland had still raised the money without difficulty, and on very good’ terms, though not quite such good terms as the Government eoiHd get. Much depended upon going about the business in the right way. Mass takes had been made in some instance? and difficulties had been caused. Money certainly was becoming more plentiful. Mr. J. A. Nash, M.P.: We want the money quickly. Mr.* Massey: That is for you to arrange. It is your job, and I hope you get through it very satisfactorily. The Prime Minister added that if an amendment of the Act- was neeesAsary to enable the boards to combine in borrowing /frioney abroad he would put the amendment before Parliament early next session. There need be no delay. The Hon. J. G. Coates. Minister for Public Works: There are people in Wellington to-day who are prepared to undertake the financing of the whole thing. You have to watch the prices, but" there is competition for. the business that you have got. The Prime Minister confirmed this statement. The Minister for Public Works added that the people he had in mind were prepared to finance the operations or to take contracts for carrying out schemes or reticulation. They were looking for the business.