LOCAL BODY DEBTS

Manawatu Standard, Volume LII, Issue 67, 18 February 1932, Page 6

LOCAL BODY DEBTS

CONSOLIDATION SUGGESTED. MB J. S. JESSEP’S VIEWS. Per Press Association. GISBORNE, Fob. 18. A suggestion that the local body i:> debtedness of the Dominion should l-i consolidated, thus giving a bettc security to bondholders and makin possible a reduction in the rate of interest. was made by Mr J. S. Jessep, vice-cnairman of the Unemployment, Board, in an interview to-day. Mr Jessep pointed out that local body debts totalled £70,000,000, and that if any was forced to default the credit of the whole Dominion would suffer. In the past, loans had been raised in a haphazard fashion, with serious results during the present time of low values. He contrasted New Zealand’s methods with those of Denmark, where local body loans were raised by the “United municipalities of Denmark” at a J per cent lower rate than was available tor New Zealand. If the whole of the local Government loans in the Dominion were consolidated, Air Jessep continued, bondholders would be offered much better security, but at a lower interest rate. This sciiemo, backed 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 the Government could not permit any body to default. In addition to the consolidation of indebtedness, Mr Jessep 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. i