HIGH INTEREST RATE.

Manawatu Standard, Volume LIII, Issue 256, 26 September 1933, Page 5

HIGH INTEREST RATE.

HARBOUR BOARD LOAN. £IOO,OOO AT 7 PER CENT. WHANGAREI, Sept. 25. The Whangarei Harbour Board this month wrote to the Bank of New Zealand stating that, after carefully reviewing the position in which it stood with the bank regarding its loan of £IOO,OOO at 7 per cent., it urged the bank to consider favourably extending to the board the right to repay the loan as soon as possible. The board considered it would have little difficulty in raising the amount at a low rate of interest. The board pointed out that in spite of a land rate levied over its district this year, the board would have difficulty in finding the money to pay the interest on the loan. The board has received a reply from the bank stating that the head office had advised it could not agree to the proposal. The chairman of the board, Mr J. A. Fin lay son, said he doubted whether any other local body in New Zealand was paying 7 per cent. The loan was due in 1956. He thought the bank was taking up a wrong attitude. The board had done all it could, and it was now for the ratepayers to take action. They could instruct the board not to strike a rate until the bank took up a reasonable attitude. It was decided to receive the bank’s letter, members agreeing that they 1 could not do anything until they ascertained what action Parliament might take regarding loans. Mr H. E. Hewlett moved that the history of the transaction should be placed before the Minister of Finance. He said £25,000 of the loan was held in Auckland and there was a partial promise of conversion of that amount. The motion was carried. The reason why the Whangarei Harbour Board’s loan has escaped the statutory interest reduction of 20 per cent, is that the whole of the money was raised in Sydney through the Bank of New Zealand. The interest is paid in Sydney. The fact that the sum of £25,000 is now held in Auckland does not affect the domicile of this portion of the loan.