LOCAL BODY LOANS

Hokitika Guardian, 18 February 1932, Page 6

LOCAL BODY LOANS

SUGGESTION FOR CONSOLIDATION.

(By Teleyraph —Per Press Association j

GISBORNE, February 18

A suggestion that local body indebtedness of the Dominion should be consolidated, thus giving better security to bondholders and making possible a reduction in the rate of interest, was made by Mr J. S. Jessup in an interview. Mr Jessup pointed out that local body debts total seventy million, and that if any were forced to default, the credit of the whole Dominion would suffer. In the past loans had been raised haphazarded, with serious results during the present time of low values. He contrasted New Zealand methods with those of Denmark where local body loans were raised by “United municipalities of

Denmark” at three-quarter per cent, lower rate than was available in New Zealand. If the whole local Government loans in the Dominion were consolidated, Mr Jessup continued, bondholders would be offered much better security but at a lower interest. This scheme, hacked by the State should result in a reduction of one per cent, on the average interest rate. In reality the State was already backing loans, as Government could not permit any body to default. Tn .addition to the consolidation of indebtednes, Mr Jessup expressed the opinion that an amalgamation of local bodies was also essential,' as in some districts five or six bodies were levying charges on the same group of ratepayers.