THE RATE OF INTEREST.

Press, Volume LXVII, Issue 20257, 8 June 1931, Page 17

THE RATE OF INTEREST.

tO THIS EOITOS O* THE . PHESS ®i r > Now that we have heard' 60 much about the reduction in tho cost -of living, and the Government having decided through the Arbitration Court that wages be reduced by 10 per is it financially sound that the rate of interest remain the same. No, the tithe has come when it is the bounden duty ;of tho Government to pass legislation enforcing the lowering of the rate of interest to 5 per cent., not only 'on all investments, but also on all first mortgages, and to 6 per cent., pr a maximum of CJ per cent, on second mortgages and bank overdrafts. This would have as great an effect, if n-ot considerably greater, on the lowering of tho cost of living, as the reduction of wages. While I am in favour of tho reduction of wages, it must bo clearly obvious to our statesmen and financiers that .this i alone will not reduce the cost of living, and unless the raf.o of interest is roduced very considerably, the result will be legligible. i'irst, if the rato of interest is re.uced, this automatically largely reduces the cost of production, which in its turn will immediately reduce the I number of unemployed, as the producers 1 will then be enabled to spend the large 1 sums of money which are being annually paid away in this extra interest, « the improvement of the land, and which will result in a much greater production. I Furthermore, effectually to attack the cost of living, it is most essential that no one section of the community should be expected to bear this cost, yot we have a most glaring case of this, awl that lies in the fact that the Government ha's seen fit to pass a cut on civil servants without first making a 10 per cent, cut in the salaries of alj members of Parliament. The fact of the true patriotism and generosity of our GovernorGeneral, Lord Bledisloo, voluntarily' reducing his remuneration should surely have been sufficient to influence our members of Parliament to do likewise, but instead, they dictate that othersmust assist in the reduction in the cost of living, but not themselves. The next step in reduction mtfst assuredly be in the dividends of all trading and business concerns. This simply means that after making certain apportions to reserve for depreciation of stocks and buildings, and allowing for a dividend of not more than 5 per cent, tp shareholders, the balance should bo apportioned by half being given to the staff by means of bonus, and half being paid to the treasury as taxes. By this means we are likely to have a more efficient staff and a reduction in the overhead charges, which is ' without doubt the greatest of all difficulties to business,firms to-day. , . ■ Lastly, if the Government is prepared to give full information regarding • the difficult financial - position that the country is in, confessing, if that is the truth, that it is impossible for us to meet our obligations to the subscribers of our loans, and will ask for a lowering of the rate of interest on these loans, the subscribers jnust be prepared .to assist, as othorwise the* timcJ will suroly coma when repayment of the total value of these loans will be impossible, and at least a redaction of 25 per cent, will have to be accepted!- : While I am not an advocate of Labour or of Socialism, lam at a distinct" loss to know why, in times .such, as these, any one particular flection of ..the community, should be made to bear the birunt Of the poor attempts so far xqade in Tedueing the cost of living,—Yours, etc., , BUSINESS MANAGES. June Gth, 1831.