LOCAL BODIES' LOANS.

Otago Witness, Issue 2842, 2 September 1908, Page 3

LOCAL BODIES ' LOANS.

A" NEW .SCHEME. (Fbom Ouk* Own" Cobhesponden*.) " WELLINGTON, August 25/ The Local Bodies' Loans Act" Amend* ment Bill," introduced to-night, contains a scheme whereby local- bodies, instead of pi^ocuring loans' t irom the Government, may raise lonas 'from tlie public on de•bentures guaranteed by tihe- Government. No such guarantee is to b© given excepting by Order in Council, and the aggregate amount to be guaranteed in any one year is not to exceed £500,000. In respect of every guaranteed loan the local authority must establish' a sinking fund in the hands of the Public Trustee. Th© annual payment into the sinking fund must be not less than one per cent of the loan,' half of this amount being paid by the local authority. . and the other half by the Government by way of subsidy. The debentures snail have a currency of 33 years, and the interest payable shall not exceed 4£ per cent. Clause 16 provides a simpler method of settling objections to the special roll 1 of- ratepayers which is prepared when a< loan is charged, on a particular part ofi^ ther-distrifct. At present-all such, objections have to ".be heard by an Asssesment Court under the" Rating Act. v ' Clauses 17 and 18 are.kitended to Temove a defect in the principal' 1 act .by. reason of which "a local authority carinotf raise a loan to pay off an existing loan it the annual charge on the district is thereby in any way increased. The amencment enables this to be done with ' th« consent of the ratepayers in tlie same manner as in the case of a loan for a. public woi-k. Clause 19 provides that in respect of aIF future loans raised by local authorities under the act the Public Trustee shall' be the sole commissioner of sinking funds, and that all sinking funds so vested", ins! him shall be invested in Goverjunenfc securities. . . Clause 20 exempts land situated in Native townships from the rule whicn prevents loans frpm being granted under part II of ths act in districts where » certain proportion of the area consists of Native lands.