UNSOLD DEBENTURES.

Lyttelton Times, Volume CXVIII, Issue 18575, 30 November 1920, Page 4

UNSOLD DEBENTURES.

The Ohristchurch City Council is ,on the same wicket as very many other local bodies in beiug unable to dispose of its debentures- Quit© a, formidable list of unsold debentures was placed before last night's meeting, and the argument in favour- of a higher rate of interest is obviously strong. This is, of oourse, an abnormal yoar. Ratepayers from one end of the Dominion to the other have been authorising loans on a scale beyond any parallel. In the first ten months of this year the total of local bodies' loans authorised by the Government amounted to just on £8,000,000, in addition to which there are State loans and numerous offerings by trading concerns. The competition" for capital is, therefore, very keen. Possibly tho policy of borrowing by local authorities is being a little overdone, but the works for which the money is wanted are, generally speaking, desirable as well as necessary, and it must be remembered that there is a lot of leeway to make up after tho unavoidable restrictions of the war period. It looks as if a general increase in the rates of interest will follow as a natural result of the competition. In the meantime, however, we may offer the City Council the same kind of advice that we gave to tho Minister of Finance. We think the council might reasonably try to "push" the sale of its debentures by bringing them more prominently before tho public than has yet been attempted. A Ohristchurch City Council debenture at 5$ per cent subject to a flat tax of 2s Cd in the £ where the bearer is liable for incomo tax is quite a good proposition for many classes of investors. It is as " safe," almost, as is humanly possible, r.nd the return is better than many an individual can guarantee himself on other investments where tho dividend is taxable to the extent of 7s 6d in the £ to-day and 8s 9d in the £ in tho immediate future. An enterprising campaign by the City Council would probably place a considerable portion of the unsold debentures that were displayed last evening. This, at all events, appears to be well worth trying, and so far as we have observed there has been no real attempt to advertise the debentures and their merits as a safe and fairly payable investment.