RAISING LOANS

Nelson Evening Mail, Volume LXI, 10 June 1927, Page 8

RAISING LOANS

CHRISTCHURCH CITY COUNCIL’S METHOD LOCAL MONEY MARKET FAVOURED No alteration in its method of raising loann is contemplated by the. City Council. savs the “Press”. The By-laws and Finance Committee reported this week: “Tile committee has considered Councillor Beaven’s motion relating to the raising of local loans on the London market, and regrets it cannot recommend the Council to take any action in the matter. It is ascertained that the minimum amount that would bo suitable to place on tho market would be not less than £IOO,OOO, and that it should he one loan, not an aggregate of several loans. The cost of placing such a loan would entail considerable expense, and the committee is of opinion that it can do much better by raising its loans within the Dominion. There has been a good demand for the purchase of the Council’s debentures, over £50,000 being raised recently.” Cr. A. W. Beaven said he hoped tho Finance' Committee would keep the matter in view. Something could be done in 'the direction he had indicated to relieve the- financial position in New Zealand. C-r. D.- G. Sullivan said there could he ~no question that the agricultural coni infinity in New Zealand’ requited more financial accommodation,’ hut in-vestigations-had shown that it was very doubtful ' whether people would lend' money on rural securities, which were not in great favour. As a matter of fact, the committee’s recommendation had been made on the purely technical aspect, rather than for economic reasons. If a 5 per cent, loan were floated in London, it would be at such a discount that it would he tantamount to per cent, interest. To raise money in London would cost from 5f to 6 per cent., which was substantially more than the cost of money raised locally. Furthermore, the London market was not disposed to make loans of less than £IOO,OOO, even by a combination af smaller loans. ‘if it was possible to raise money abroad more cheaply than in New Zealand, the matter would receive further consideration. ‘, The clause was adopted.