WELLINGTON LOANS.

Auckland Star, Volume XXIV, Issue 141, 16 June 1893, Page 3

WELLINGTON LOANS.

PROPOSED CONSOLIDATION,

(by telegraph,—own correspondent.)

Wellington, this day. Sir Julius Vogel has proposed to the Mayor the consolidation of the city loans, by which £5,000 would be saved annually in interest. He thus explains his scheme. " The existing loans are : Wellington consolidated debenture?, 1876, for £200,000 fit 6 per cent., repayable in 1907, the annual interest- being £12,000 ; improvements loan, 1879, for £100,000 at 6 per cent., extinguishable by drawings boginniug in 35, 40, and 45 years, the balance in 50 years, annual interest, £600 ; waterworks loan, 1880, £130,000 ab 6 per cent., repayable as previous loan, annual interest £7,800; total indebtedness, £430,000; total annual interest, £25,800. The now loan not issued is the sanitation loan, 1892, of £165,000. The proposal is to form a consolidated loan for converting the old loans, and for raising the additional amount of the new loan. As much of the consolidated loan as is required in substitution of the unissued loan should be ofiored either aba fixed price, or at a declared minimum. The consolidated loan to bear interest at the rate of 4 per cent., and to have a currency of 50 years, and to be represented by registered stock, transferable by deed, the stamp duty to be commuted whether there should be a sinking or drawing fund, and if so, its condition is a matter about which the corporation should consult its own convenience. After the new loan becomes well known the old loans will be obtainable ab about an average of £113 of the new loan for £100 of the old loans. This would mean an addition of £77,400 to the outstanding amount of £410,000. Supposing £7,000 were added to cover expenses, the total of the converbing part of the new loan would be £514,400, or in round figures cay £515,000. The annual interest on this amount, ab 4 per cent., will be £20,600, whilst the existing annuul charge for the loans, which will be* converted, is £25,800, go thab there will be an annual saving of £5,200. The addition to capital amount of £85,000 to be ultimately repaid may bo estimated to represent an annual payment of about £558, accumulating at 4 per cenb. over 50 years. Deducting this representative amount, there is a net saving of £4,642 annually. Besides including £7,000 for the expenses of conversion, the portion of the consolidated loan to represent the unissuod loan of £165,000 might be issued at about £98, and at an expenße including commission, brokerage, underwriting, and advertising, of less than 4 per cenb. The loan, to meet theßO expenses, might be increased to £175,000, and added to tho £515,000 to represent the existing loans, would make the total of the new consolidated loan £690,000. The intost at 4 per cent would represent £27,600, or less than £2,000 in excess of what is now paid for the three existing loans without the newly authorised one of £165,000. The above plan will require a new Act, which should be passed by September. Tho "Post" says this scheme has mot with the approval of local financial experta, to whom it has been submitted, and its adoption is desirable.