LOCAL BODY LOANS.

Taranaki Daily News, 24 July 1920, Page 5

LOCAL BODY LOANS.

HIGHER INTEREST NECESSARY. MONEY TO BE DEARER. (By Wire.—Parliamentary Reporter.) Wellington, Last Night. The difficulties being met with by local bodies in borrowing at the maximum rate fixed by the Finance Act of last session were brought to the notice of the Prime Minister in the House today. Mr. Nash said that local bodies were prohibited from" borrowing, at a higher rate than 5% per cent. Since the war had en'ded there had been need for a great deal of reconstruction work, and 'the local bodies had had to get authority from the ratepayers for loans, but the local bodies were still tied to the maximum rate of 6% per cent, interest. He was sure he was safe in saying that it wan impossible to raise money at the price of 5% per cent., and he wished to know whether the Minister of Finance would agree to assist local bodies by allowing them to borrow at a higher rate. ,

Mr.»Massev said that the Government had been anxious to keep down the rate of interest in this country, and they were still anxious to keep down the rate. There had been an increase in the rate in other countries—in Britain and in Australia—and New Zealand was feeling the effects of this increase. Up till the present the Government had been successful in keeping the rates for local bodies down to per cent., but in the case of some local bodies requiring to renew loans they had found it impossible to get the money at 6% per cent., and the Government had to grant them permission to raise the money at 5J per, cent. This had been done in several cases. Wherever there was hardship, if the local body would communicate with the Government they would do their best to assist. However,,ho could see plainly 'that there was going to be an increase in the price of money in this country, afld he hoped.it would not be a big increase.