NEW PLYMOUTH LOAN

Dominion, Volume 32, Issue 258, 29 July 1939, Page 12

NEW PLYMOUTH LOAN

Question By Mr. Polson

BORROWING PROCEDURE

The recent New Plymouth Harbour Board loam was the subject of a statement by the Prime Minister, Mr. Savage, in the House of Representatives yesterday, following a question by Mr. Polson (Opposition, Stratford). Mr. Polson asked the Prime Minister: (1) Whether, having consideration for the fact that the Government’s recent refusal to allow the New Plymouth Harbour Board to raise a loan in New Zealand, to avoid default in its Loudon loans, at a higher rate than 34 per cent, caused a loss to the board reliably computed at more than £40,000, and inasmuch as the money could have been raised in New Zealand at a substantially lower rate than the board was compelled to pay in Australia, he will state what action the Government now proposes to take to compensate the board and the ratepayers of Taranaki for this regrettable result? (2) Whether he will explain why, though the Order-in-Council authorizing the loan from Australia was effected ou February 2, it was not published in;the Gazette and no information regarding the matter was made available from official sources?

(3) Whether he will cause an inquiry to be made into this grave delay? Harbour Board’s Request.

“The maximum borrowing-rate for local bodies in New Zealand was fixed at 34 per cent, by section 9 of the LocalAuthorities Interest Reduction and Loans Conversion Amendment Act, 1934, and, in the interests of local bodies generally, this rate was maintained by the present Government till June of the present year,” the Prime Minister said. “The New Plymouth Harbour Board loan which matured on May 1, 1939, was domiciled for repayment in London, but it appeared that the cost of renewal there would have been above that at which the board was offered ir lotin in Australia. The harbour board therefore requested the Government to issue the necessary authority for it to borrow in Australia at 4| per cent.

“There is no legal obligation requiring Orders-in-Council issued under the Local Government Loans Board Act to be gazetted. Whether any particular Order-in-Council, or variation thereof, is or is not gazetted depends to a large extent on whether the proposed loan is to be taken up by the public generally or by a particular lender. If the local body proposes to invite the public to subscribe, it is desirable, though not mandatory, that particulars of the conditions of the loan should be promulgated through the Gazette to which any person con have access. Where, however, the local authority has a specific lender in view and the terms of the consenting or varying Order-in-Council have been drafted to suit the requirements of that particular lender there is not the same need for publication in the Gazette, a certified copy of the Order-in-Council being in such cases supplied to the local body and by it to Hie specific lender. Consenting Order. “In the particular case referred to fiy the honourable member the original consenting order fixing the rate at 34 per cent, was gazetted on November 3, 1938, because the harbour board at that date proposed to invite the public to lend the money. When later on the harbour board decided to liorrow in Australia on terms mutually agreed on between it and a specific lender, a varying Order-in-Council consenting to the alteration in the interest-rate and other conditions was issued, but. as already explained, there was no need, in view of the fact that the money was to be advanced by one lender, to publish particulars of the varying Order-in-Council iu the Gazette, and in accordance with past practice in similar cases the varying Order-in-Council was not gazetted."