RURAL ADVANCES BONDS.

Otago Daily Times, Issue 20473, 30 July 1928, Page 10

RURAL ADVANCES BONDS.

OPERATIONS OF BANK OF NEW ZEALAND. MINISTER REPLIES TO CRITICISM. (Special to Daily Times.) WELLINGTON, July 29. Statements that the Bank of New Zealand had obtained rural advances bonds at a cheaper rate than other applicants were again denied in the House of Representatives on Friday night by the Minister of Finance (Mr W. Downie Stewart). The bank, said the Minister, bought the bonds on the same terms as anyone else. The Government had received an offer from the bank to underwrite the loan,, and that offer was accepted. Subsequently, the bank itself took up a number of the bonds at £94 10s. The bank received an underwriting fee in connection with the bonds, and he presumed that Labour members concluded that the bank had received the bonds at a lower rate. The price paid for the bonds and the underwriting fee were two entirely different factors, however). Mr J. A. Lee (Auckland East): What was the underwriting fee paid to the bank? The Minister: One per cent Mr Lee; Did not the underwriting practically constitute a State guarantee ? The Minister: No. The bank merely undertook to see that the bonds went off. Mr Stewart explained that the bank re cei-ved only half the usual rate for brokerage.