THE BOROUGH LOANS

Manawatu Times, Volume XLVI, Issue 2075, 16 March 1922, Page 4

THE BOROUGH LOANS

The intimation made by the Mayor on Tuesday evening, that arrangements had been completed for a loan of £186,400 from the A.M.P. Society, with a currency of ten years, is of considerable importance to the whole of the inhabitants of Palmerston North. The rate of interest (7 per cent.) is higher than had been expected, but it is questionable whether, after paying brokerage, better terms could have been secured had the loan been raised in the Mother Country. The loan is short-dated, and if the rates of interest should substantially fall in the next few years, the borough will be in a position to make fresh arrangements at the expiry of the term. The Mayor was careful to point out on Tuesday evening that the loan is a reproductive one, and that it will be spread over tiic whole borough without any special rate being collected. It remains to be seen, however, whether the Mayor’s anticipations are realised. Much will depend upon the price at which electric current is supplied by the Government from the Mangahao works. There is reason to fear that the cost of these works will be much in excess of the original estimates, and that the price of the current may be almost prohibitive. Time alone can tell whether this fear is justified. The Borough Council could, of course, recover any loss on the electric light service by increasing the charges for gas. This would mean that the overhead costs of trades and industries would lie considerably increased. However, the necessity for new gasworks, and for an electric installation, appears to be urgent, and the townspeople will have the satisfaction of knowing that the expenditure of loan money in the next few months will relieve the industrial situation to an appreciable extent.