INTEREST ON LOANS

Hokitika Guardian, 20 January 1930, Page 2

INTEREST ON LOANS

STATEMENT BY Silt JOSEPH. WARD. WELLINGTON. Jan 15., The Prime Minister (S'ir Joseph Ward), to whom was referred a Press statement alleging that the rise in the rate of interest on Government loans will cause embarrassment to local bodies, whose loans have been authorised at a, lower rate than 5-]- per cent., states that the chairman of the laical Government Loans Boaid informs him that from March last year to November the Loans Board only sanctioned 16 loans concerning 10 local bodies at a rate of interest lower than o* per- cent. The statement that the Loans Board as recent as December had prescribed oj 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 rate than oj per cent.

Sir Joseph adds that it will not he necessary for local bodies to apply again to the Lo ad Government Loans Board for an increase in the rate of interest. Such a contingency as an Increase in current rates of interest afier loans have been authorised has been provided for in the statute, and under Section 114 of the Local Bodies Loans Act, 1926, local authorities can apply to the Minister for Finance for his consent to a- variation in the rate of interest, which is then prescribed by Order-in-Council.