INTEREST CHARGES

Rotorua Morning Post, Volume 2, Issue 574, 4 July 1933, Page 5

INTEREST CHARGES

(Press Assn.-

local body limit FINANCE MINISTER EXPLAINS GRADUATIQN OF SCALE 'CLASSIFICATION OF SECURITIES

— By Telegraph — Copyright).

Wellington, Monday. In commenting upon the recent decision of the Government to resume over-the-ounter selling of Government securities at 31 per cent. the Minister of Finance, Rt. Hon. J. C. Coates, to-day made reference to the position in regard to current issues of local body securities. ; The Minister' said that the Local Bodi.es' Loans Board, with the co-qp-eration of the Government, was going into the matter of interest rates, and he had been advised that the board, at its meeting held on June 27, had dei eided that rates of interest on local body loans sanctioned at that meeting and to be dealt1 with in the future should be restricted to a maxi-. mum of 4 per cent for"best local authorities." . However, the board recognised 'that all .local authorities eould not be expected to place their loan requirements at this rate and had decided upon an intermediate rate of 4 1-8 per cent for "second class local p-Uthorities," with a third rate of 4i per cent. for "smaller local authorities." This arrangement, continued the •Minister, would approximately preserve the distinction which had always existed between the securities of local authorities of various classes. He felt confident that local au- . thorities would have little difficulty in filling their requirements at these , rates. In f act there was evidence that . even prior to this last meeting of the board, loans had heen arranged on lower basis.