PROPOSED LOAN OF £75,000.

Gisborne Times, Volume VI, Issue 192, 21 August 1901, Page 3

PROPOSED LOAN OF £75,000.

THE RATE OF INTEREST.

j At the meeting of the Borough Council j last night the draft advertisement of the loan proposals was submitted tor consideration. Cr Kennedy again brought up the subject that had been debated at The previous meeting as to the rate of interest. He said they should not bo satisfied with the evasive reply sent by the Government, but should press the matter to ascertain at what rate of interest the money could be obtained. It was no use, he said, for them to go to the public with the scheme in that form when they knew there was no chance of getting the money at 4 per cent. The Council would be in a strange position if the poll were carried and they then found they could not obtain the money at the rate of interest

stipulated. Tho Town Clerk said that the rate of interest had been set down at 4 per cent ; any sinking fund would be iu addition to that. Cr Miller said that he had brought the question up long ago, but Councillors would not listen to it then. Cr Harding said they had threshed the matter out at the previous meeting, and

raised the limit to 4 per cent. Cr Bright : We are trying to get it for less than the Auckland City Council. Cr Whinray said they could not go back on the decision at the previous meeting. Cr Jones said be had taken up a very clear position in tho matter ; that if the

money must be borrowed at 41 per cent, the borough could not stand it. If they expected to pay 41- per cent, for .£75,000 it would mean they would have a rate of 4s in the £ before they knew where they were. If they would raise as much as £75,000 they must have the interest less than 4.1 per cent. Cr Bright : The trouble is that wo have not got the fixing of the interest. Cr Jones : If you want to kill the thing it will be done by putting the rate of interest at 44 per cent. The Act shows that Government loans are from 3 to 34 per cent, according to term. Cr Bright : But we have no knowledge that we can get it. Cr Miller said that Cr Jones had taken up a fair position, but he could not see how the money was to be obtained for less. He quoted a number of eases where from 5 to 6 per cent, was being paid. The Mayor pointed out that the figures were for loans obtained some time ago. Cr Jones said he believed that, failing the Government, they could get it from some of the insurance companies. The Mayor said that by the Financial Statement he saw that £373,000 was loaned out by the Government at 3.1 per cent., including sinking fund. Cr Bright : But that does not compel the Government to give it to us. The Mayor : They won’t give it if we don’t apply in a proper manner. Cr Whinray : We should not raise a doubt in their mind. (Laughter.) Cr Kennedy : There is a feeling in this Council that the poll is going to fall through, and that we are just doing our duty to the public in lotting it go to tho vote. I want to check that-, and to let the thing go before them fairly. The Mayor said the Act allowing them to borrow from 3 to 34 per cent, had only boon in force since 1899.

Cr Whinray : Wo passed a resolution that the limit should bo 4 per cent. Cr Morrison : Wo cannot go beyond that. If they exceeded that they might as well save the oxpense of advertising, for there was no use in going further. Cr Kennedy : You can talk that way at the poll. Cr Morrison : I want to talk here as I would talk there. I think this has been put in simply to block tho poll. His Worship has put it clearly that wo can get tho money at 34 per cent. Tho poll will never bo carried if you put it so high. Cr Miller: I am not inclined to take His Worship’s idea in this. I do not think he says it can be got at 3£ per cent.

The Mayor: Certainly not. Cr Miller said they would be in a nice fix if they carried the poll and then found that the money could not be got at the rate of interest set out. They should know first if they could get the money at that price. Cr Bright: Tho position is very simple. “ If we go through all the formalities have you got tho money to lend us?” is the question wo should ask. Cr Harding said that at tho previous meeting ho had brought up the question, and the limit was raised from 34 to 4 per cent. “ AVith all duo deference to Cr Morrison,” continued the speaker, “ 1 have doubts in my mind. I have hoard it stated at the street corners that they do not think one Councillor is sincere, and that the fact of their bringing forward the proposal to get the money at 34 per cent was sufficient to throw cold water on the whole thing. I believe Councillors are sincere ; I am sincere, and I think if we say we are not going to have a water supply and drainage unless we get tho money at 4 per cent we will never have water and drainage. I have conversed with those well up in tho money market, aud they say without hesitation that wo will not be able to get the money at the price. We are not likely to got the money under 44 per cent. If we still stick to 4 per cent wo will not get water in our time.” Cr Kennedy moved : “ That the draft advertisement bo submitted to our member, Mr Carroll, with the request that he take immediate counsel with Ministers as to the prospect of the borough obtaining the loan on the lines laid down, and as we are led to believe according to the Government Loans to Local Bodies Act, 1899, section 3 of clause 2, page 73.” Cr Miller seconded the motion, which was carried. It was agreed to leave the amounts in the draft blank. The extreme charge for interest on the loan had boen set down at £3375. It was agreod to send an urgent wire to Mr Carroll, informing him that the letter was being sent. The Mayor and Crs Kennedy and Bright were, on the m otion of Cr Miller, appointed a commi ttce to draft the letter.