THE ELECTRICITY LOAN.

Auckland Star, Volume LII, Issue 71, 29 March 1921, Page 5

THE ELECTRICITY LOAN.

FORMAL SECURITY RATE ! STRUCK. ' ____ ? NO INTENTION TO COLLECT. • TOTAL LOAN CHARGES £17,100. "> A special meeting of the City Council was held to-day in order to pass a statutory resolution assuring the security for the" £500,000 electricity extension loanj which is being underwritten in London. The Mayor (Mr. J. H. Gunson) informed the assembled councillors that under the Local Bodies Loans Act, 1913, it was necessary, immediately upon the, flotation of a loan, to strike a special rate as security. He made it clear, how. ever, that this course in the present instance was purely a formal proceeding, as the rate would not be collected, the undertaking for which the money was wanted being a paying concern. The Mayor added that they had not yet received confirmation of the Prees Association telegram, but he had no doubt that the news was correct, and he had advised the manager of the Bank of New Zealand, the Council's agents in London, to ask for confirmation. He had also issued the necessary authority to raise the loan money at once. As to the total charges on the loan, they would amount to £17.100. including underwriting, commission, stamp duties, all discounts and exchanges, and their own agents' charges. That, he thought, must be considered very satisfactory. A total cost of £17.100 on a £500,000 loan was much better than they thought possible. In short, he thought the Council would generally consider, in view of the difficulties of the financial position here and at Home, that the best possible had been done in obtaining the loan. Mr. P. M. Mackay congratulated the Mayor on behalf of the Council upon the very successful flotation of the loan. He considered it was a very fine thing for Auckland to have obtained the money under such favourable terms. The speaker added a tribute to the able manner in which the Mayor had borne the responsibility of arranging for the financing of this loan, and assured him of the Council's appreciation of his efforts, the eminent success of which should result in a considerable lightening of the burden of office for the time being. The following resolution, moved by the Mayor, and seconded by CouncillorMackay, was then carried unanimously: "Ju pursuance and exercise of the powers vested in it in that behalf by the Local Bodies Loans Act, 1013. the Auckland City Council hereby resolves as follows: "That for the purpose of providing the interest and other charges on a loan of £500.0011. authorised to be raised by the Auckland City Council under the above-mentioned Act for the extension and equipment of the existing electric power station and plant, and the provision of sub-stations, machinery, and plant for improving and extending the supply of electricity in the City of Auckland, the said Auckland City Council hereby makes and levies a special rate of sixpence in the £ upon the ratable value of all ratable property of the whole City of Auckland, and that euch special rate shall be an annual recurring rate during the currency of such loan, and be payable yearly on the first day of June in every year during the currency of such loan, being a period of twenty-one years, or until the loan is fully paid off.'"