TRANSPORT LOANS

Auckland Star, Volume LXVI, Issue 299, 18 December 1935, Page 8

TRANSPORT LOANS

INTEREST PAYMENTS.

REDUCTION SOUGHT. NEW ZEALAND CURRENCY ? It is more than likely that the Auckland Transport Board will take a definite stand in regitrd to the payment of interest on loans domiciled in London, and it is suggested that the amounts falling due early m the New Year should be met in New Zealand currency. The proposal, it is understood, involves the establishment of a fund to which the balance of the money representing the difference between the value of the pound in the Dominion and in Great Britain would be transferred to provide for additional payments being made at a later date should it be proved that the board was legally bound to pay the debenture holders in English currency. The debentures concerned, it is stated, are those which represent that portion' of the £1,250,000 worth of debentures which were handed over to the Auckland Tramway Company by the Auckland City Council in payment for the tramway undertaking, and which were subsequently domiciled in London. The interest payment due is in the vicinity of £50,000 and its payment in New Zeahind currency would lighten considerably the burden of interest which has been pressing heavily on the board, particularly since the rate of exchange was raised. ° Negotiations Proceeding. Negotiations in the matter are proceeding, and discussions, it is believed, have taken place between representatives of the board and the finance committee of the City Council. The council is vitally interested, as when it transferred its liabilities with respect to the ti am ways to the Transport . Board, on the board being formed some years ago. an undertaking was given that the commitments would be honoured. It is probable that further" light will be thrown on the board's proposition at to-morrow evening's meeting of the council and that an opportunity will be given to councillors to express their views. As both bodies are substantially comprised of Labour members it seems that the council might acquiesce in tlu» proposals, but it is stated on the other hand that the political section of tbw Labour movement is not anxious for the board to take the drastic step proposed, at all events for the tiine being. The New Year, however, is not far off and the question is whether or not >e board will be content to fall into line with the wishes of the political organisation or. prefer to bow to the dictates of the purely financial aspect of the question. Another important point is tlmt those who favour the board's line of action argue that such action would not mean repudiation as the proposed fund would be available to provide for the extra payment in English currency at a later date.