LOCAL BODY FINANCE.

Otaki Mail, 15 March 1922, Page 2

LOCAL BODY FINANCE.

BANKS win both wavs,

At Its meeting on Saturday the Horn whenua County Council had before it a matter relating to local bodies' bankarrangements.

In a circular letter from the Napier Borough Council it was pointed out that, banks in New Zealand were act mg m accord in the direction of praetically nullifying section tr, 0 f the Finance Act, When a local authority took advantage of the authority gj Ve J by the above section the bank ekh et reduced tire overdraft limit or itj serted in the letter granting the oven draft a proviso “that this limit nuts'] not be used tor the repayment o' moneys transferred from special loaii accounts lo the general account.” Lo I cal bodies were thus penalised bv having lo pay 7 per cent interest or overdraft while the bank rate foil money lodged on fixed deposit is oj per cent for three months and 3J pei cent, for six months. On tliesij grounds support was asked for in tfiJ following resolution:—

“That the Government he asked uS introduce legislation providing thap credit balances of local authorities oil loan accounts shall be set off by 1 j banks against debit balances on oihcm accounts as regards payment of .rAi terest. on the latter accounts.” Cr. Harkness said the banks did oil-’ favour allowing such a practice, foj constant alterations in the books would be involved by thess set-oltii Nevertheless he was sure that the ihntsi could be managed with a liulfi trouble. At present the position wap intolerable when the bank paid umiei •1 per cent for money loaned lo it, aii;|] on the other hand the local body hdl to pay 7 for the same privilege. Ti." Council agreed to give the protes support.