GOVERNMENT LOANS.

Otago Witness, Issue 3958, 21 January 1930, Page 11

GOVERNMENT LOANS.

HIGHER RATE OF INTEREST. EFFECT ON LOCAL BODIES. .STATEMENT BY PRIME MINISTER. WELLINGTON, January 15. The Prime Minister (Sir Joseph Ward), to whom was referred a press statement alleging that the rise in the rate of interest on Government loans will cause embarrassment to local bodies whose loans have been authorised at a lower rate than 51 per cent., states that the chairman of the Local Government Loans Board informs him that from March last year to November the Loans Board sanctioned only 10 loans concerning 10 local bodies at a rate of interest lower than 5J per cent. The statement that the Loans Board as recently as December had prescribed 5] per cent, as a maximum rate of interest that a number of local bodies can pay on new loans is incorrect as no loans were sanctioned at the December meeting at a lower rate than 5$ per cent. Sir Joseph adds that it will not be necessary for local bodies to applv again to the Local Government Loans Board for an increase in the rate of interest. Such a contingency as an in crease in current rates of interest after loans have been authorised has been provided for in the statute, and under section 114 of the Local Bodies Loans Act. 1920 local authorities can apply to the Minister of Finance for his consent to a variation in the rate of interest, which is then prescribed by Order-in-Council. PROSPECTS OF LOAN. PRIME MINISTER HOPEFUL. WELLINGTON, January 1.5. Inquiries made from the Prime Minister indicate that although the Government’s 54 per cent, securities have been on the market for a few days only, a satisfactory response by the' investing public is being made. The term of the loan, viz., to February 15, 193“, will doubtless prove acceptable to many investors. including trustees.

Sir Joseph added that he hoped the Government would obtain the amount necessary to carry on its financial programme.