MATURING LOANS

Poverty Bay Herald, Volume LIX, Issue 17957, 8 December 1932, Page 7

MATURING LOANS

LOSS OP SINKING FUNDS PROTECTIVE LEGISLATION (Parliamentary .Reporter.) WELLINGTON, this day. In accordance with the undertaking given by the Prime Minister at Stratford recently, legislation was introduced in the House last, night authorising local authorities to raise the full amount of London maturing loans by way of renewal loans, and to carry forward existing sinking funds ns tho nucleus of sinking funds for the renewal loans. As a result of exchange costs, local bodies in Now Zealand which have loans maturing in London are faced with substantial expenditure in the remission of their sinking funds to London on the. loan maturity date. Tho existing law requires them to utilise the full amount of sinking funds at maturity date, and the authority to borrow is limited to the amount of the difference between tiie total of the maturing loans and '.lie accumulated sinking funds held for their redemption. The legislation before the House is designed to obviate the loss of sinking fund moneys due to their rc:ni-.oon to London. Safeguards are piomded to ensure that sinking funds will not pass bank into the hands of if-nal authorities, but will be definitely t vt aside as part of sinking funds for the renewal loans. This procedure can ho adopted only with the prior sanction of the Local .Government Loans Hoard.