ROADING LOAN OF £26,000.

Shannon News, 18 June 1926, Page 2

ROADING LOAN OF £26,000.

COUNTY COUNCIL GETS FAVUUU-

ABLE TERMS

The Horowhenua County Council has arranged to borrow tlie money required for next year's loading programme on very reasonable terms in view of tlie fact tliat many local bodies are paying 6 per cent, fqr their requirements. At Saturday’s meeting the Finance Committee reported as follows: “Your Committee after having investigated probable lending sources for the £26,000 which is required for the county’s share of the current year’s work have decided to recommend that providing

satisfactory arrangements can be made for the periodical lifting of debentures, that the offer of the Australian Mutual Provident Society to lend £26,000 at 5| per cent, on terms as conveyed in their letter of the 2nd instant, be'accepted.” The chairman (Mr G. A. Monk) in explaining the loan, said the Finance Committee hud gone very carefully into it, and lie and the clerk had closely investigated the various sour, ces of lending and found that a fair amount of money could have been secured elsewhere, but subject to a procuration fee of 1 per cent, the loan offered would be available at the rate of £2OOO per month, tlie first payment being on October Ist. They

had loan money enough to carry on at the present rate of work up to the beginning of September, and might then have a month when there would not be much loan money in hand. Certainly tlie interest bad to be paid , in Australia, which necessitated paying exchange, now ?s 6d per cent., tlie general, average being 10s per cent. If the loan was for 25 years, the total payment of interest would mean £37,563, which amounted to £5 15s 7d per cent,, approximately. If the money bad been borrowed in New Zealand at 6 per cent, per annum the total would be £39,000 approximately a difference of £l43✓ in •25 years.' If the money had been borrowed from the Public Trust Office at 6 per cent,, instead of taking up this money month by month as it, was required, it would have to be taken up as it was available from the Public Trust and then re-invested, if not

required at the time, with tlie bank from which the Council would receive interest at the rate of 3j per cent. If they went outside, they would have to pay 1 per cent, procuration, reducing every £IOO to £99. Taking everything into consideration the loan was a satisfactory one, especially seeing that they could have it in monthly payments. He did not like the idea of the money being domiciled in Australia, but the Finance committee liad gone very carefully into' tlie question, and lie personally had stayed a day longer in Wellington in an endeavour to borrow the money from New Zealand sources, but without avail.

Gr. Cat ley: You have done very well. • „ ' , Gr. McLeavey: It. is a really good loan.- , . The Chairman, sum that to-day the New Zealand Government was raising a 5$ per cent, loan at 98?/ in London. Of course, the Council had to establish a sinking fund for this loan, thereby wiping it out in 25 years. They had arranger that all the loans did not. mature o-

-ether. They did not know what tne interest would be in 25 years, an; were not very interested m it. n u was lower, it-would be ell but i greater the people then would doubt criticise this Council. Cr. McLeavey: They will have to raise the rates. (Laughter). The chairman concluded by sajmg that the Government Life had no money available at the tithe loan was raised, indeed, they would not have any for the next nine or ten months. Therefore, the Council had not other option than to borrow from Australia.