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Hokitika Guardian, 29 August 1921, Page 2

AnyKitSE comment has boon made in financial oirolos on the fact that while tho Oovornmont was most careful to see that local bodies do not pay more than the legislative rate of interest in Now Zealand, they are permitted to go outside New Zealand and engage to pay principal and interest in other vountries, borrowing at tho rate of 7 rer cent, or more, if they cannot get it at 7 per cent. They must not pay that rate in New Zealand,, yet the Government itself is paying 6 per cent, on debentures issued through the Post Office, while private concerns can come into the local market and offer 71 per cent, ti 8 per cent, on debentures. Local bodies are bound, down by law not to offer such a rate in New Zealand, but they can do so in Australia. It is absurd that payment of this interest and principal should lie forced out of Now Zealand. It was also found that the debenture tax on local body debentures, to say nothing of the legal restrictions of the rate of interest they are empowered to pay in New Zealand, operated adversely. Money was repaired for certain works, harbour or municipal, but it could not lie borrowed locally at a rate well under what tile money market justified, although if permission were obtained any (|Uantity at 7 per cent, or more could be asked for in overseas money markets. The further debenture tax of 2s 6d in the £1 (not chargeable on Government debentures by the way), tended to make local bodies’ debentures unpopular in New Zealand. The treatment of debenture holders as absentees because they may go to live out of New Zealand, and principal and interest of debentures payable in New Zealand, again militated against the successful issue of local bodies’ debentures in the Domin-