THE PRICE OF MONEY.

Auckland Star, Volume L, Issue 251, 22 October 1919, Page 6

THE PRICE OF MONEY.

Here the Government has just floated a loan at 4J per cent., and failed to get 1 all the money it asked for. The balance is to be obtained by compulsion. According to a message published to-day, the New South Wales Government has had ! to pay 5J per cent, for a three million loan in London, and while the New Zealand loan was floated at par, it has had ' to accept £98 for every £100 worth of stock. Just before tihis New South Wales loan was floated the Soudan Gov- ; eminent paid 5i per cent, on three and a half milliona floated at 41 per cent, discount, the stock being repayable at ' j 103 by annual drawings commencing ten | years hence. There was nlsd the import--1 ant fact that the Imperial Government ' ] guaranteed the interest on this issue | thus making the security equal to that of _ j British Government loans. Even when j allowance is made for the fact that our ' | loans arc exempt from income tax, the | difference between the rate at which ' j our Government has been borrowing and ' I the rates ruling at Home is striking. It ' | makes' one wonder how much longer the i New Zealand Government will he able to : I borrow money at 4* per cent. We raised t this question the other day in discussing the housing problem, pointing out that while the rate of interest to be paid by the tenant of the State's house was - fixed, the rate to be paid by the State r for the money borrowed to build tlie ? house could be varied by the Minister. \ If the Minister has to raise his rate to lenders, what will become of the financial stability of the housing scheme? 1 To-day's information about rates in Lon- , don gives additional point to this qucs--1 tion. It is a warning to New Zealand that it cannot be sure of being au ! P to finance its schemes, whether housing 2 I railway building, ofr hydro-electrTc' j development, on a basils of 4J per cent.