NEW INTEREST RATE

Sun (Auckland), Volume III, Issue 872, 16 January 1930, Page 10

NEW INTEREST RATE

GOOD RESPONSE TO NEW ISSUE EFFECT ON LOCAL BODIES Press Association ' ELLINGTON, Wednesday Inquiries made from the Prime Min. I ister indicate that although the Gov' 1 ernmenfs 5J per cent, securities havi ! been on the market a few days, only 4 ! satisfactory response by the investing public is being met. The term of tfa* * loan, viz., to February 15, 1937, { doubtless prove acceptable to many i n , vestors. including trustees. Based on the present prospects, iv r Joseph Ward added, he hoped the Uo v . eminent would obtain the amount necessary to carry on its financial programme. A statement that the rise in the rate of interest will cause embarrassment to local bodies whose loans have been authorised at a lower rate than 5| per cent., which was referred to by the Prim© Minister, who said that the chairman of the Local Government Loans Board had informed him that from March last year to November tha Loans Board sanctioned only 16 loans jo ejw i: )u -seipoq p?ooi oi ' interest lower than per cent. The statement that the Loans Board as recently as December had prescribed 5i 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 p er cent. Sir Joseph Ward adds that it will not be necessary for local bodies to apply again to the Local Government Loans Board for an increase in the rate of interest. Such a contingency as an increase in current rates of interest after loans have been authorised has been provided for. Under section 114 of the Local Bodies Act, 1926. local authorities can apply to the Minister of Finance for his consent to a variation in the rate of interest, which is then prescribed by Order-in-Council.