LONDON HOUSING

Evening Post, Volume CXXII, Issue 18, 19 October 1936, Page 13

LONDON HOUSING

LOAN OF TEN MILLIONS

A special meeting of the London County Council was held recently to sanction a loan of £10,000,000 3 per cent, stock, to be issued at 99 per cent., says "The Times." Mr. E. G. Culpin, vice-chairman, presided.

The finance committee reported that they had been in consultation with the Bank of EngHnd> which advised that the present was a suitable time for making the issue. On the Bank's advice, the committee recommended that the nominal rate of interest should be 3 per cent., and that the stock should fall due for redemption at the "end of twenty-flve years, the council to have the. option to repay at par on three months' notice at any time during the last five years of its currency. The stock would be designated London County Council Consolidated Stock, 1946-61. It was , proposed that the charge for underwriting should be 1 per cent., plus £ of 1 per • cent, for arranging the underwriting.

Sir George Gater, the clerk, read a further report stating that the' estimated cost of the issue would be £180,000.

Mr. Charles Latham (chairman of the finance committee), moving the necessary resolutions, expressed regret that it should have been necessary to call members together during the recess. It would, however, be realised that the time appropriate for the issue of stock depended on the course of the money market, over which the finance committee had no control. The committee had been advised that the operation recommended should be undertaken forthwith. FIRST CALL ON PROCEEDS. The first call on the proceeds would be the funding of £3,800,000 of high-interest-bearing housing bonds, which the council had redeemed or were about to redeem out of temporary borrowings. So far as the bonds were concerned the operation not only effected a change-over from short to longerterm borrowing, but represented a saving in interest payments of about £80,000 a year. The rest of the proceeds of the issue was in the main required to finance the council's current capital expenditure on the clearance of slum property, the abatement of overcrowding, street and other improvements, hospitals and schools, and contributions towards the establishment of a belt of open spaces round London.- It would also be used in part to make advances to metropolitan borough councils. The major part of the expenditure was in respect of duties placed upon the.council by the legislation of recent years. The council had twice previously (in 1928 and in 1935) made issues of similar magnitude, once partly for cash and partly for conversion, and once wholly for conversion. The largest issue of stock for cash only which the council had hitherto made was in 1926, for £7,000,000. He acknowledged the helpful cooperation of the finance committee, and especially of Sir Samuel Gluckstein and Mr. Douglas, who had been associated with,him in the later stages of the negotiations. The reports were received and the necessary resolutions adopted.