LOANS TO LOCAL BODIES

Te Aroha News, Volume XXXIV, Issue 5481, 30 April 1917, Page 1

LOANS TO LOCAL BODIES

A writer iu an exchange, referring to the increasing difficulties of our local bodies to raise loans for public works, advocates a system of loan flotation, which although very old on the Continent of Europe, is new to the people of New Zealand, aud when something now is suggested the natural question asked is what good purpose would be saved ? Amongst the many answers to this question, the two of most importance are, first the help given to many struggling bodies (who cannot now obtain money for public works at a reasonable rate) in enabling them to tap a source of supply as yet untouched iu New Zealand, but largely taken advantage of on the Continent, being the loose moneys held by the general public. The second good purpose effected by the issue of a loan on the lines mentioned would be the diverting of large sums of money into safe investment channels which now go into purely gambling schemes. Allow a local body to float a loan in particles of £lO, issuing bonds for same gwhose minimum redemption shall be £lO, thus securing the bondholders’ capital, paying a small interest, with a certain number of bonds redeemable by lot annually at a bonus or premium, aud it would be found that the incentive of this bonus would induce the small farmer, the artisan, the shopmau, aye, aud every man and woman iu the Dominion, to look to their waste expenditure, cuttiug it down to save enough to buy a bond ; aud this would do more good in makiug people thrifty thau all the restrictive legislation that ever has been or ever will be enacted. All that keeps it back is the want of knowledge on the part of the people aud our old insular prejudice against learning anything from the foreigner. New Zealand lias been in the van before with constructive legislation, and here is auother opportunity for it to load the way by being the first British Dominion to initiate such a grand system of municipal aud public bodies finance.”