A LOCAL LOAN

Evening Post, Volume CVI, Issue 82, 16 October 1928, Page 11

A LOCAL LOAN

PUBLIC TRUST CHARGE , CLASH WITH BOARD'S ORDER A ease of one Government institution running counter to another lias arisen in connection with the attempt of the Upper Hutt Borough Council to raise a loan of £750 for the relief of unemployment. The council received the sanction of the Local Bodies' Loans Board to raise money, the rate of interest being restricted to 5-J per cent. . The council's practice has been to raiso all loans through the Public Trustee, but he is unable to lend the amount required at less than 6 per cent. The council accordingly wrote to tho Minister of Finance asking whether it could borrow the £750 at the rate of 6 per cent., or whether there was a possibility of getting the money through any of the State lending institutions at 5| per cent., the rate stipulated by the Loans Board. The reply received from the Treasury Department was to the effect that as the rate of interest had been restricted to 54 per cent, by the Loans Board it was not considered desirable to issue an Order-in-Couneil prescribing a higher rate until every effort had been made to raise the loan at the rate sanctioned. It was suggested, therefore, that other sources should be tried. The matter came up for discussion at the meeting of the Upper Hutt Borough Council last night. The Mayor (Mr. P. Robertson) thought that when a local authority applied to the Public Trustee for' *■ loan, ho should be able to supply the money as cheap if not cheaper than a private moneylender could. From a private source the council could, obtain the money at 5J per cent., but the Public Trustee; charged 6 per cent. When a local body got such treatment as the Upper Hutt Council was getting it made him think that all the charges levelled against the Government in regard to its attitude towards the Public Trust Office were largely justified. Ho thought that the matter should not be dropped, but should be brought under the notice of the Prime Minister. Councillor J. X, Johnston said that ho had an idea that the Public Trust money was wanted for another purpose, as a fund from which' the Government could easily obtain loans. Councillor J. O. Duff expressed the opinion that if the Public Trustee could not deal with the council at the rate of interest it required, it should go elsewhere for the loan. ; The Mayor, however, thought that the council should first place tho facts of the case before the Prime Minister to see if it could get any redress. If that failed, the council could go to private moneylenders. A motion in this direction, moved by the Mayor, was carried.