AN AUCKLAND LOAN

Otago Daily Times, Issue 21995, 3 July 1933, Page 9

AN AUCKLAND LOAN

DECISION ABOUT INTEREST BAD IMPRESSION IN LONDON (United Press Association.) (By Electric Telegraph—Copyright.) LONDON, June 30. The Daily Telegraph says that th« Auckland City Council’s instructions to pay the interest due on July 1 on the tramway loan in New Zealand currency has created an unfavourable impression in the city. No such instruction was received for the July payments of other Auckland loans. The resentful holders are likely to protest- to the Auckland Council. MR FORBES’S COMMENT. LONDON, July 1. (Received July 2, at 8 p.m.) Mr G. W. Forbes (Prime Minister of New Zealand), commenting on the Auckland loan, said that the Government disclaims responsibility for what local authorities do.

BRITISH PRESS COMMENT, \

" A SHEER SUBTERFUGE.”

LONDON, July 1.

(Received July 2, at 8 p.m.) The Financial News, in an editorial, says that Auckland’s action is causing a' widening in the quotations for all New Zealand securities, including Government loans by tjvo points. The Times city editor says that the gilt-edged market was unpleasantly surprised by the intimation that the coupons of the city of Auckland 5] per cent, tramway loan were being paid in New Zealand currency, resulting in their temporary omission from the official list.

The Daily Mail says that holders “ previously received payment in accordance with the wording of the bond, which apparently gives the option of receiving sterling on London. Auckland’s decision is based on the. fact that the debentures were originally issued in New Zealand, consequently it is claimed that they are covered by the House of Lords’ ruling in the Broken Hill Proprietary case in January.” Sir Thomas Wilford told the Financial Times that the matter had been taken up with his Government, Which was now fully acquainted with the London views. The Financial News describes it as “ the most impudent example of, all defaults, for it is a sheer subterfuge. It is unfortunate that a conclave of town councillors should, by a hasty act, cast doubt on the credit of New Zealand herself, which hitherto has not faltered.”

STATEMENT BY CHAIRMAN.

(Per United Press Association.) AUCKLAND, July 1.

The chairman of the Auckland Transport Board (Mr Allum), in a statement commenting on to-day’s London cable message concerning the payment of interest on bonds, said the board was merely complying with the requirements of the law. He declared that if the payment were made in sterling members of the City Council and Transport Board would be personally liable, for the difference.