MUNICIPAL BORROWING

Waikato Times, Volume 98, Issue 16095, 19 September 1924, Page 6

MUNICIPAL BORROWING

HIGH RATES OF INTEREST. ';-;• V. CHECK ON ADVANCEMENT. The president of'the Waikato subprovincial district of the New Zealand Farmers' Union; (Mr Feisst), at a meeting,-of,the ,executive yesterday, moved the following" iresolution: — "This meeting desires to express its emphatic opinion on the unreasonably large borrowing by municipal bodies of finance at high rates' of interest for other than reproductive works; and further, considers this huge borrowin? for non-productive purposes, the cost of which must be ultimately borne by the country's exports and during times when the Dominion's main assets, i.e., its primary producers," are unable to finance themselves and feel themselves going steadily backward, will certainly react upon the country's resources, and unless' checked may be' the mean's' of seriously retarding the Dominion's advancement." A

• Speaking, to the motion, Mr Feisst said that' during the last few lyears wheh money could be obtained fairly easily and pressure was brought to bear on them to relieve unemployment, municipal bodies had borrowed beyond a safe margin and at a high rate of interest and expended the money largely oh, non-productive works. ..They may be assets, but were great liabilities to the" country. By raising these loans they diverted finance that was required for primary production.- These- expenditures must be met, and it increased the cost of commodities which must be met by the country's exports. Municipal bodies are.siiU borrowing in their,own interests, and checking the 'country's advancement. It was evident •that-bor-rowing was unwarranted except for production purposes commensurate with the country's .progress. Mr Lee Martin considered, the Government were primarily responsible for the high rate of interest paid by local bodies and that a big consolidated fund would have rectified the whole thing..,. ■'■-. ■ ■*- '•■'■'-

The • resolution, which was carried unanimously, is to be forwarded to the Prime Minister. *;, :' ~..,: .','...