IN STERLING

Southland Times, Issue 22210, 30 December 1933, Page 6

IN STERLING

OVERSEAS INTEREST

PAYMENT BY TRANSPORT BOARD

“WITHOUT PREJUDICE”

(Per United Press Association.)

Auckland, December 29.

A decision to pay in sterling, “without prejudice,” the half-yearly interest due on January 1 in connection with those debentures of the tramway loan of £1,250,000 lawfully domiciled in London was made by the Auckland Transport Board to-day. The question was discussed at a special meeting following the return to New Zealand earlier in the day of the chairman, Mr J. A. C. Allum, who left for London on September’ 23 to endeavour to arrange with the English bondholders a mutually satisfactory plan for reducing the amount of interest payments. The board’s decision was made “in view of the recent decision of the House of Lords” in the Adelaide Electric Supply Company case given after Mr Allum had left London. It was revealed in the chairman’s report, however, that after consulting with a section of the English bondholders a plan had been propounded whereby the holders should accept a reduction of three-quarter per cent, in the rate of interest and that the payment of interest should be postponed for five years, both interest and principal to be payable in English currency. The arrangement provided for the consideration of a suitable adjustment if the judgment in the Broken Hill case were reversed. Mr Allum consulted the board by cablegram regarding that offer, but the board rejected it. Mr Allum said that interference on the part of the London Stock Exchange was the real difficulty he had to face. When the board decided not to adopt the proposal regarding the reduction of three-quarter per cent, in the rate of interest Mr Allum thought it best to return to New Zealand as soon as possible. Mr Allum said he was still of the opinion that local bodies should take every step possible in an endeavour to secure a reduction in interest charges. He had found the bondholders in England very reasonable. The board paid its last half-yearly instalment of interest in London in sterling ‘ without prejudice.”