THE INTEREST BILL.

Auckland Star, Volume LXII, Issue 148, 25 June 1931, Page 6

THE INTEREST BILL.

CASE FOR REDUCTION. (To the Editor.) ■> The suspension of the payment of war debts for one year to the United States is of little economic value to New Zealand. , The amount of war debt payable by the Dominion ' at March 31, 1930, amounted to £70,000,000, of which £45,802,914 is an internal debt, and the balance is payable abroad. Of our internal debt the sum of £35,327,829 is not subject to income tax. The interest varies from 4 per cent to G per cent. The debt does not include the amount advanced to soldiers for farm& or homes, nor does it include the amount - involved in pensions. The concession, if ratified by Congress of the United States, will therefore have very little value in relation to the present economic position of this • Dominion. Our troubles are largely internal, and as such should be decided and remedied by ourselves. The yearly interest on the whole of our national internal debts (war included) is £5,228,455. The interest on our local body internal debt is £2,014,715. The interest onv our private mortgage debt, as near as can be accurately ascertained, is £24,000,000, making a total yearly interest bill of £31,243,170. The rate of interest is artificial; it is not regulated by supply and demand. With a national reduced income, with a terrific wave of unemployment, with a compul- . v sory reduction and regulation of wages, and • with a national deficiency in the Budget of ; £4,500,000, the question at issue remains, asto whether we as a Dominion can meet our V annual commitments abroad and at the same time maintain the interest on our huge inter- "; nal debt. A compulsory reduction 'in all : interest will lower national taxation, it will lower local body rates, and the reduction of mortgage interest will help every ( family man. Always in a period of deflation the bond* holder, the debenture-holder and the mortgagee gains, to the disadvantage of the rest of the community. During this period houses, farms,■: food, clothing, labour and all commodities fall • in price and value, and the rate of interest..... should be legalised and regulated accordingly. 4 Reduction is not repudiation. Reduction must ; be made to avert a national calamity. Unfortunately New Zealand has not yet produced-... a statesman who has the courage to take the. .. . stand. D. A. TOZER;