OVERSEAS LOANS

New Zealand Herald, Volume LXX, Issue 21597, 15 September 1933, Page 12

OVERSEAS LOANS

PAYMENT OF INTEREST COMMERCE CHAMBER'S VIEWS The obligation of New Zealand local bodies regarding the payment of interest on overseas loans was discussed in the report of a committee ofc the Auckland Chamber of Commerce presented to the council of the chamber yesterday. "Granting that the legal position may be clear that the only obligation is to pay in New Zealand currency, wo consider," stated the committee, "in the interests of the Government and of those local authorities who may in the future have to go to the London market for further finance, that every effort should be made to avoid doing anything that will affect our credit on that market. If the Government feels that this is of paramount importance, then we consider legislation should be, brought down validating the action of local authorities paying their interest in English currency even though not legally bound so to do. Furthermore, the Government itself should assume the liability for any such extra payments that may be necessary.

"We consider this matter is so important that local authorities dealing with financial interests at Home should he asked by the Government to make any representations they have through the Government. Failing this, if any such representations arc n»;ie direct, the Government should see that an explicit statement is cabled Home stating definitely the Government's attitude in the matter and whether or not it supports the contentions put forward by the local body concerned." With reference to the visit to England of Mr. J. A. C. Allum, chairman of the Auckland Transport Board, the committee considered it should be made perfectly clear that Mr. Allum was meeting the bondholders at Home in respect of one particular matter, that was, the question of his own board's indebtedness; . that in no way whatsoever was lie representing other local authorities, and any action that was taken or arrangements that were made .by him would be solely in respect of the Transport Board's obligations to its own bondholders.