GOVERNMENT LOANS

Press, Volume C, Issue 29436, 11 February 1961, Page 12

GOVERNMENT LOANS

Tender System Suggested

i Prom Our Own Reporter) WELLINGTON, Feb 10.

A system of tendering for Govermenl loans was advocated today by Mr A. J L Catt, senior research officer of the New Zealand Institute of Economic Research At the conference of the New Zealand Association of Econom Mr Catt claimed the Government would raise the maximum in loan monies from the market if it offered more frequent loans

"Instead of going on the market for one or perhaps two loans in the course of the year it should consider going on the market more often for smaller loans. I believe th? result will be an increase in total borrowing.

“This, would give the Government the opportunity of trying an experiment: the issue of loans on a tender basis The Government would offer a smallish loan carrying a stated rate of interest—but call for bids from investors. “The investors—l have in mind particularly the institutions—would bid by quoting the price at which they would buy The Government could then accept all tenderers above a certain price which would give the Government control of both the effective rates of interest and the amount it would borrow. It would also ensure that the Government did not pay a higher rate of interest than necessary.”