CITY LOANS

Evening Star, Issue 20864, 6 August 1931, Page 14

CITY LOANS

£424,0DD MATURING THIS YEAR BENEFIT OF SINKING FUNDS In moving tho adoption of the report of tho Filiation Committee at the mooting of the City Council last night, G'r Shaddock drew attention to the- fact that loans maturing this financial : year amounted to £424,500. Those loans would have to be renewed, but a sinking fund of £63.635'was available to help, and tiie amount required to bo raised was £300,700. The necessary strips lb renew the loans provided for application to tho Loans Board, and no doubt tho board would have something to say in connection with the amount of sinking fund that the council would have lb provide in future. It would uiidonbtedlv bo a larger amount than in the past*. It seemed to him thnt all Government and city works should bo paid for in a much shorter time than ha I Itoen the case in tho past. Any public utility such as railways, .hydro plants, etc., should be paid off. in fifty years. They had an object lesson in the ease of the tramways and railways, which, if they had been paid for before they became out of date, the country would not have had to fear the transport innovations as C was now doing. With regard to loan renewals there was another matter to come before them not as the City Council, but as the Drainage Board. The chickens .of, the old Drainage Board were now coining homo to roost. In January next there was a loan renewal of £32,000, and. ho did not think there was a penny in tho sinking fund account. Then in 1933-34*-3o and 36 the amounts were ppeated, and he thought bo was right in saying that by 1936 £273.000 of loans would have to bo renewed, and, while there was a little in the sinking fund, the bulk of it was without sinking fund at all.

For the next few years, went, on Or Shaddock, the financial position required careful consideration, ft would interest councillors to hear that the decision of Parliament by which■ tlfo''.ratio of interest payable by local authorities on now loan money obtained after August 1 was to bo reduced had had the effect of creating considerable activity in the loan market for the Inst few days of the month of July. The City Corporation had been engaged in filling up the Waipori dam construction loan at the time, and by the end of July all the available debentures bad been disposed of, well over £71,000 having been received. Any further loan money offering would he placed in the Drainage hoard loan for fifteen years with interest at (ho new rate of 5 per center Mitchell, who seconded the inched, said it was obvious from what tlio'cbair‘mim had told them that there was a very serious position with regard to money to ho faced shortly, and he hoped the position of the country would improve to an extent that would, enable the council to got money, otherwise it might ho in an awkward position. The report was adopted.