LOCAL BODY DEBTS

Grey River Argus, 19 February 1932, Page 4

LOCAL BODY DEBTS

CONSOLIDATED IN N.Z. To Save Any Defaults (Ter Press Association). GISBORNE, February lb. The suggestion that local body indebtedness of the Dominion should be consolidated, thus giving better security to bondholders, and making possible a reduction of the rate of interest, was made by Air J- s - Jessup, Th an interview. Mr Jessup pointed out that local body debts total seven million, and that if any were forced to default, the credit or the -whole Dominion would suffer. In the past, loans had been raised haphazard, with serious results during the present time of low values.

He contrasted New Zealand methods with those in Denmark, where local body loans -were raised by the 4‘united municipalities of Denmark ’ ’ at three-quarter per cent. lower rate than available in New Zealand. It the whole of the local government loans in the Dominion were consolidated, Mr Jessup continued, bond hold ers would be offered much better security, but at a lower interest. Thi< scheme, backed by the State, should result in the reduction of one pe. cent, on the average interest rate. In reality the State is already backing the loans as the Government could not permit anybody to default.

In addition to the consolidation of indebtedness, Mr Jessup expressed the opinion that amalgamation of local bodies was also essential, as in some districts five or six bodies were levying charges on the same group of ratepayers.