PAYMENT OF INTEREST

Greymouth Evening Star, 11 March 1932, Page 2

PAYMENT OF INTEREST

NEW SOUTH WALES LAWWhile the effect of the New South Wales law, limiting the rate of interest, will be beneficial to many local bodies in New Zealand, it does not benefit local bodies in Greymouth, tor the reason that any loans they have negotiated, were obtained in Melbourne, 'f’he position is that, under Section 5 of the Interest Reduction Act, 1931, in New South Wales, anybody paying interest to a subscriber in that State must not pay more than four and a-half pounds per cent. As the majority of the debentures were obtained at an interest rate of or 52 per cent.,’the saving in some instances will be considerable.. Any local body paying to subscribers outside New South Wales, does not get the benefit of the reduction. The circular letter from the Audit Office sets out that the effect of Section 5 of the Interest Reduction Act, 1931, New South Wales, is that local bodies in New Zealand are entitled to a reduction of 4/6 in the £ on interest payable in New South Wales on debentures issued before October 11, 1931, provided that this reduction does not reduce the rate of interest below 4i per cent. If local bodies, after being advised of the effect of the legislation in question, pay interest in full in New South Wales, such payments •to the extent of 4/6 in the £ will be contrary to law, and the members of local bodies making such payments will be liable to oe surcharged.