LOCAL BODY LOANS

Taranaki Daily News, 17 January 1930, Page 11

LOCAL BODY LOANS

EFFECT OF NEW STATE RATE.

PRIME MINISTER’S STATEMENT.

A statement that the rise in the rate of interest on Government loans will cause embarrasment to local bodies whose loans have been authorised at a lower rate than 5J- per cent., was referred to the Prime Minister.- Sir Joseph Ward states that the chairman of the Local Loans Board informs him that from March last to November the Loans Board sanctioned only 16 loans, concerning 10 local bodies, at a rate of intciest lower than 5J per cent. The statement that the Loans Board as recently as December had prescribed 5 j 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 late than 54 per cent. Sir Joseph Weird adds that it will not be necessary for local bodies to apply again to the Local Government Loans Board for an increase in the rate of interest. Such a contingency as an increase in current rates of interest after loans have been authorised has been provided for. Under section 114 of the Local Bodies Act, 1926, 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 . ;