“TAP LOANS”

Otago Daily Times, Issue 26956, 16 December 1948, Page 9

“TAP LOANS”

GOVERNMENT FINANCING PROTEST AGAINST SYSTEM PA AUCKLAND, Dec. 15. “4 have previously protested against this ‘ tap loan ’ method of finance, and I do so again,” said Mr Keith N. Buttle, chairman of the. Auckland Stock Exchange and president of the Stock Exchange Association of New Zealand, at the annual meeting of the Auckland Stock Exchange. Through most of the year, said Mr Buttle, the Government had had on offer for public subscription a 3 per cent, loan with a 17-year currency to provide funds for various public requirements. “This is the third of these issues, popularly known as * tap loans,’ which have been offered in as many years,” he continued. The proper method was to issue a prospectus for a loan of a certain definite amount for certain specified requirements, with fixed opening and closing dates. When the loan was subscribed, the Government should then keep out of the market entirely for the balance of the year. This would have a healthy influence on the whole of the Government loan section and in the long run would react to the benefit of the State. “I would strongly recommend, also, that in future investors be given the alternative of a shorter currency, say five years, at a slightly lower interest rate,” said Mr Buttle. “It is becoming increasingly clear that 17 years is not an ideal currency for a Government loan under the present market conditions.”