LOCAL BODIES’ LOANS.

Gisborne Times, Volume XXXVI, Issue 3997, 30 July 1913, Page 5

LOCAL BODIES’ LOANS.

THE GOVERNMENT POLICY. IMPORTANT AMENDMENTS. LOCAL LOANS GUARANTEED. LBY TELEGRAPH—PAEEIA HENTARY CORRESPONDENT] WELLINGTON, July 29. The Local Bodies Loans Bill, which was introduced to-day makes, many important amendments i.n the existing law connected with the granting of loans to local bodies. The measure is a portion of the consolidation policy of the Government in relation to advances. One of its main provisions is that large local bodies may go on the money market themselves, while other local bodies may borrow either individually or in combination with a State guarantee np to £oo.ooo a The machinery for raising loans is simplified. An authority may raise one loan to cover more than one purpose or a special loan for a defined part of a district. Where an object concerns several districts tiie authorities thereof may unite in raising*a joint special loan, such authorities agreeing upon the appointment of the loan, the portions of the contributing rates to be paid by each, and also upon the control of the work. V hen the original loan is insufficient to complete the work, the authority may borrow without the ratepayers’ authority a further sum amounting to one tenth of the original &um. In relation to security for loans it is provided that every special rate shall be calculated to yield, if necessary, £lO per centum more than the annual charges in respect of the loan. Every special rate is to be made over an area within continuous boundaries and all rateable property within that area shall be liable. Special rates shall be reserved solely to their special loan as security. In mining districts local authorities desiring to construct public works may impose a special rating or mining privilege, the rateable value being a sum which, invested at six per cent., would produce a yearly amount equal to the rent paid to the Crown. As collateral security the goldfields revenue may bo pledged. It is provided in respect of loans bv the Advances Office that the superintendent shall exercise a practical limit of £60 ; 000 to any one authority in three years. Loans rendered necessary by flood, tempest or accident shall have priority over other loans. In the case of insufficient capital being available, preference shall be extended to outlying districts' applications for roads and bridges. Provision is made whereby a local authority may raise a special loan outside of New Zealand with the guarantee of the State when the consent of the ratepayers has been obtained. In such case, in the local authority’s default, the loan will be paid out of the Consolidated Funds. Such guaranteed loans, however, must not exceed £ooo,ooo a year. ' No such guarantee i.s to be given to the State unless the local authority lias made due provision for the loan. Interest is not to exceed 5 per cent. The term of the loan is' to be 33 years, and provision is made for a sinking fund of 1 per cent. If a ioeal body defaults under these provisions a receiver will be put in *by the State and he will have all the powers conferred by law on a mortgage except that he cannot sell without an order of a judge of the Supreme Court and that no public reserve may be sold. The receiver may also amend the special rate upon an order of a judge of the Supreme Court. It will be the receiver's duty to apply the moneys he receives in the payment of the principal ana interest of the loan.