LOCAL BODY LOANS

New Zealand Herald, Volume LXXI, Issue 21938, 23 October 1934, Page 13

LOCAL BODY LOANS

gj rj —it is necessary for me to correct ah impression which I find to have been created by my remarks made at a recent meeting of the Mount Eden Borough Council, in regard to local body loan conversions, and published in your issue of the 17th instant Since J spoke 1 have now bad an opportunity of personally investigating "the matter further, and 1 find that the position is not such as was at first believed by myself and by others throughout the Dominion, to be. the case. Up to date approximately thirty-two and a-half millions of internally domiciled local body, loans have been the subject of conversion orders. In some cases, totalling approximately eleven millions, the authorising Orders-in-Council have given the local authorities concerned an option to repay upon giving the requisite six months' notice, but any such repayment is not to take place earlier than a date live years immediately preceding the new maturity date for the securities fixed under the conversion order. The position in regard to the Mount Kden Borough Council is that the council has this option to repay its debentures by notice as aforesaid, on a date not. earlier than five years frouT" the expressed maturity dat»* and, furthermore, in no circumstances may any such repayment be made before April 1 1942. It is, perhaps, as well to remember that these conditions are abundantly clear as set out in the prospectus issued by the council in "terms of its conversion .order, asd notice of the provisions therein contained must now of necessity be assumed to have come to the knowledge of those interested, either 'as holders or purchasers thereof. It will be found, on perusal of the Mount Eden Borough Council's order, that the new maturity dates have, as nearly as possible, been arranged to coincide with the maturity dates of the old debentures surrendered for conversion. However, to interfere with the debenture contracts of local authorities by giving,, a block power to repay would, in mj opinion, bo I'mwarranted and unnecessary, and J desire to make the position quite clear that there is fy> power under existing legislation to achieve such object. npr is any such action in thin direction contemplated. V K. N. Buttle.