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Capital of Local Loans Fund and creation of stock to supply deficiency.
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13.—(1) All sums paid to the Local Loans Fund on account of the principal of any Local Loan shall be credited in account to the capital of the Local Loans Fund.
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(2) All sums credited to the capital account of the Local Loans Fund in respect either of the principal of Local Loans or of an excess on the income account, shall be treated as a sinking fund for the redemption of Local Loans stock, and may be from time to time invested either in advances under this Act or in the purchase of securities in which the National Debt Commissioners are authorised to invest money held by them on account of trustee savings banks or post office savings banks.
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(3) The said sinking fund may be from time to time applied for the purpose of the purchase or redemption of Local Loans stock, and Local Loans stock so purchased or redeemed shall be forthwith cancelled.
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(4) If at any time there is no part of the said sinking fund which the Commissioners think fit to invest in an advance for Local Loans, and the money otherwise standing to the account of the Local Loans Fund is insufficient to meet the money authorised by Parliament to be advanced for the purpose of Local Loans, and for the time being required for that purpose, the National Debt Commissioners shall certify the same to the Treasury; and thereupon the Treasury shall create such amount of Local Loans stock as appears to them to be required; so, however, that such stock shall not be created in any financial year for raising sums exceeding in the aggregate the amount authorised by Parliament to be advanced during that financial year, after deducting the amount of the said sinking fund which the National Debt Commissioners think fit to invest in advances for Local Loans.
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(5) Instead of creating Local Loans stock as aforesaid, the Treasury may authorise the National Debt Commissioners to borrow temporarily on such terms as may be approved by the Treasury from the Bank of England or Bank of Ireland, or out of any cash balances in the hands of the National Debt Commissioners, available for investment under the Acts relating to trustee or post office savings banks or any other Act, the sum required as above mentioned for the purpose of Local Loans, so, however, that the sum so borrowed shall not increase the total amount authorised to be raised by the National Debt Commissioners in any financial year, and either the amount so borrowed shall be repaid out of the moneys standing to the capital account of the Local Loans Fund or the nominal amount of Local Loans stock authorised to be created under this section shall be reduced by an amount equivalent to the sum so borrowed and not repaid, but Local Loans stock may be created for the purpose of such repayment.
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(6) Where any sum so temporarily borrowed in any financial year has not been repaid, the Treasury may, in any subsequent financial year, in addition to any amount of Local Loans stock otherwise authorised to be created, create Local Loans stock to such amount as is required to repay the amount so borrowed.
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(7) Any authority given by the Treasury, under this section, to borrow any sum shall be sufficient authority to the Banks of England or Ireland, or the National Debt Commissioners, to advance that sum.
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(8) All sums raised by the creation of Local Loans stock shall be carried to the Local Loans Fund, and placed to the capital account of that fund.
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