LOANS TO LOCAL BODIES.

Ashburton Guardian, Volume XXXIII, Issue 8743, 17 December 1913, Page 5

LOANS TO LOCAL BODIES.

A TEST CASE.

(Per Press Association.)

. WELLINGTON, December 17. An important case affecting some'of,^ the municipalities in New Zealand" is •' occupying the attention of the ' Chiet Justice^o-day. The action is a special case, taken under an originating sun\r mon's, with a view to obtaining -air opinion on ' certain 1' questions or law touching the scope of legislation passed , in"!9l2, increasing the- rate of interest on loans granted >to local bodies. The': plaintiff is tho Whangarei Borough Council, and the defendant the-'. State Guaranteed Advances Board. In February, 1911, the plaintiff corporation applied for a loan of £19,200. On February 15 tho Board provisionally approved of the loan on terms requiring it to have a currency of 36£ years and . a, rate of interest at 3£ per cent. ; Tho Council duly levied the rate, and on Juno 1. 1911; formally applied for. a grant of the loan, and askf-d that itbe paid in five instalments. instead of in, a- lump sum,,as originally proposed. . The "first and second instalments were paid, and on applying for the third instalment, on February 27, 1913, the Council was informed that, in accordance wiLh an amendment to the Act. it^ would bo necessary to charge a higher" rate of interest, amounting to 4-J- per cent.