LOAN MONEY

Dominion, Volume 31, Issue 136, 5 March 1938, Page 13

LOAN MONEY

Help To Local Bodies

HAWKE’S BAY POSITION

By Telegraph—Press Association. Hastings, March 4

Several local bodies in Hawke’s Bay will welcome the announcement by the Minister of Finance, Hon. W. Nash, that the Government is taking steps to arrange 34 per cent, money available for local bodies that had difficulty in obtaining accommodation in the open market.

“The Hawke’s Bay Rivers Board has been unable to obtain loan money in the open market at the rate stipulated bv the Government,” said the secretary, Mr. W. J. O’Connell, in an interview. The board required £60,000 to complete the river control scheme now in hand, and it appeared that the board was now able to obtain money from the State Advances Corporation. SERIOUS DRAWBACK Loans As Investments By Telegraph—Press Association Hastings. March 4. A serious drawback that will kill a popular avenue of private investment is alleged by a Hastings official against the scheme mentioned by the Minister of Finance, Hon. W. Nash, allowing local bodies to obtain loans at 3J per cent. 'through the State Advances Corporation. Until 18 months ago it. was stated that local bodies were able to raise loans privately at interest which made the loan system a sound and easy investment for private individuals. The new procedure outlined must have a detrimental effect on numerous persons throughout the Dominion who otherwise had invested in local body loans because of the safe remunerative interest rate. In the last 18 months, however, local bodies were obliged to raise loans at 31 per cent. This had not been easy as the experience of several local bodies has shown that people could not be Induced to invest readily at a low rate. The new conditions wmuld mean the final blow to those who hoped to use loans as the best available form of investment.