LOCAL BODY LOANS

Wairarapa Times-Age, 17 May 1939, Page 5

LOCAL BODY LOANS

STANDARD RATE RAISED TO 4} PER CENT FOLLOWING ON GOVERNMENT FLOTATION. ANNOUNCEMENT BY PREMIER. (By Telegraph—Press Association.) WELLINGTON, This Day. The Prime Minister (Mr Savage) stated today that, in connection with the position arising out of the flotation of the Government’s internal loan, consideration had been given to the question of the adjustment of the rate of interest for local body borrowing in the Dominion. “The new rate for local bodies,” said the Prime Minister, “will be 4?, pet cent, as compared with 4 per cent on the Government issues.. The slightly higher rate will place the local bodies in a position to obtain a fair share of the funds available for investment from time to time and thus enable essential works under their jurisdiction to be carried on.”

In regard to existing unexercised authorities to borrow at 31 per cent, the Prime Minister stated that, on application being made to the Treasury, arrangements would be made to issue an amending Order in Council authorising the local bodies concerned to borrow at the new rate of 4.1 per cent.

Mr Savage intimated that whik many of the larger local bodies would no doubt find it possible to borrow at a lower rate, it may be necessary at a later date in the case of certain of the smaller local authorities to provide for some variation in the issue price of their loans. This, however, would not affect the new rate which the Government propose to stabilise at 4., per cent for this class of borrowing.