NEW CITY LOAN ISSUE.

New Zealand Herald, Volume LVIII, Issue 17966, 16 December 1921, Page 6

NEW CITY LOAN ISSUE.

SUM OP £400,000 RAISED.

SIX PER CENT. AT 94. SPEEDY ACCOMPLISHMENT. WORKS TO BE . FINANCED. A loan of £400,000 under the City Council's Empowering Act (authorising the consolidation of various loans and giving power to raise £500,000 for the purpose) has hcen underwritten in London. The issue and taking up of this portion of the loan have been very speedily accomplished, the Bill only having passed into law recently. The faat that the Empowering Act was passed last week was reported to the council last evening by the Mayor, Mr. J. H. Gunson. He said that when in Wellington he appeared before the Local Bills Committee of the Legislative Council, following which Sir Francis Bell expedited the passage of the Bill through the Upper House, and it went through all its stages in ono sitting in that chamber. Thereafter its signing was expedited also. This enabled him, with the authority of the council, to get cablegrams away to London on Friday last in furtherance of the negotiations regarding the sum of £400,000, which it was proposed to offer on account of the council's £500,000 consolidated loan. The negotiations in this connection are now proceeding.

The amount of £400,000, which the council had agreod to issue, and to which the above negotiations referred, wis to be allocated as under:—

Permanent formation and paving of various city streets . • .. 60,000 Permanent lormation and metalling of streets and execution of drainage works in Groy Lynn 65,000 Auckland City Tramways loan (balance) • • 3,600 Crematorium loan (balance) .. 3,900 On account of tramways additional loan (£125,000); Groat South Road tram extension 90,006 An account of drainage loan (£72,500); city drainage .. 32,500 Paving in concrete and formation of Great South Road .. .. 20,000 Anzac Avenue improvement scheme 50,000 Loan to Auckland Drainage Board 25,000 Loan to One Tree Hill Road Board 60,000 Total .. t -. .£IOO,OOO The balance of the £500,000 loan, namely, £100,000, which it was not proposed to issue at present, as the works provided for in the above schedule of £400.000 would for'some time meet requirements and fully engage the corporation's staff, was apportioned as under :— Auckland and Suburban Drainage Board (balance), £25,000; tramways additional loan (balance), £35,000; drainage work (balance), £40,000; total, £100,000. ' With regard to the validation of the agreement with tho Dilworthj trustees, which was embodied in the Act, it was recommended that the Dilworth Trust Board be advised that the ageement had been validated and was now operative. The Act enlarged the boundaries of the Domain cricket ground and charges for admission might now be legally made at the new boundaries.

The report was considered in committee. On resuming in.open council the Mayor announced that it had been adopted and action taken in connection with the loan had been confirmed. It had also been decided to forward intimations to the Drainage Board and the One Tree Hill Road Board that their loans of £25,000 and £50,000 respectively would bo available from the £400,000 raised by the council.

Loan Raised on Favourable Terms.

In a statement made after the meeting Mr. Gunson said that immediately tho council was in a position to do so last week it got into touch with London, and in the past six days it had succeeded in having its loan underwritten on what it deemed to be favourable terms. A cablegram had been received from London/that evening to the following effect:— "The City Council's £400,000 issue has been underwritten. Prospectus will be issued on December 15; title.of '1943 loan'; debentures £100 each; 40 per cent, paya-ble application and allotment, 54 per cent, on January 16." This meant, said the. Mayor, that the council had secured its money at a 6 per cent, rate of interest, at £94, which was only two points less than the recent Government £5,000,000 loan (a 6 per cent, one at £96). The Government, in connection with the council's new loan, although it had ngt guaranteed it, had done all it could to assist it in London. The total cost of the loan to the council would be £6 10s per cent. There would be some costo associated with it, off which there would be the premium for the remission of the money to New Zealand. Actually speaking, therefore, it was a. 6 per cent, issue, which would assist the city treasurer as against a 6i per cent, issue, and roundly the coßt would be £6 10s including redemption* The success of the loan was due too to the fine standing of the Auckland City/ securities in London.

Works for the Winter Months. The coming into Auckland of the £400,000, said Mr. Gunson, would provide a great deal of employment for the winter and this would be a very fine thing indeed. The schedule in tho report he had submitted to the council that eyening showed where the money would bo expended. The works on this schedule would fully engage the activities of the council for the next 18. months, at the end of which period Auckland would be fairly well roaded in concrete. The new would enable the completion of the Remuera Road concreting, also that of the whole of the Manukau Road to Onehunga, the Great South Road to the Harp of Erin (including the tramway extension thereto) in conjunction with the One Tree Hill Road Board, besides Alnert, Wyndham, and other city streets.