LOCAL BODY LOANS

Evening Post, Volume CXIII, Issue 7, 9 January 1932, Page 11

LOCAL BODY LOANS

EXCHANGE PREFERENCE

AN EMPHATIC PROTEST

(By Telegraph.) (Special to' "The Evening Post.")

CHRISTCHUBCH, Bth January. An emphatic' protest against the Government using its powers in the export licenses order, "to cover up the financial difficulties Of local bodies bygiving them the preference of London exchange," and1 a criticism of the "lamentable" failure of public authorities "to stop the tremendous rate of borrowing," are contained in a letter which has been addressed to the Prime Minister, Eight Hon. G. "W. Forbes, by the Canterbury Chamber of Commerce.

The text- is as follows: "Since the issue of the special Gazette on 22nd December, 1931, covering export licenses order, businessmen have been seriously alarmed to learn that £14,000,000 5s to be impounded in London out of exporters' credits to pay Government interest, Treasury bills, and local body interest.. This chamber is agreed that in the case of interest due on Government loans our national credit requires that some arrangement shall be made, to pay this, interest, and to that extent, 'so long as the arrangement is only a temporary one, it does not wish, to question the Government's action, even though this action is a further interference with private business. "The chamber has, however, issued repeated warnings concerning local body indebtedness, and it is now alarmed to learn that a commandeer of exchange is to be- applied to assist local bodies to pay their interest due in London. The credit of local bodies is in an entirely different category from our national credit, ana this chamber protests emphatically against the Government, using its power to cover up financial difficulties of local bodies by giving them preference of London exchange, which is the property of private traders. }Vc see. no reason why local bodies should not buy their exchange on the same terms as traders. We think the time is long past whon the skids should bo greased to enable them to saddle us with further burdens.

"A Press report published on sth January also indicates that £4,000,000 will be required for redemption of Treasury bills falling due in June next. "We consider it grossly unfair and unjust thajfc the Government should so restrict the business and enterprise of the country because it lias failed lamentably in reducing its expenditure in accordance with the country's ability to find means, arid so has had recourse to this too easy method of finance.

"The special emphasis of this protest is upon the general failure of public authorities to stop the tremendous rate of borrowing, which can have no other ending than sorious consequences for the country and the Government, whom we desire to help. "This chamber would bo glad to know, ana respectfully asks, if there are other short-dated loans falling due, or does the Government propose further loans on Treasury bills, which would increase the already large 'first* pull' of £14,000,000. Lastly, on behalf of importers, we would like some definite assurance that if it is necessary for the Government to make first call of £14,000,000 on exchanges, will there still be sufficient funds available in London for reasonable requirements of legitimate trade? An assurance on this point is specially asked for." No reply has been received to the letter! '