INTEREST RATES.

Press, Volume LXVII, Issue 20334, 5 September 1931, Page 11

INTEREST RATES.

3 'i'O *MB EDIT6B OF THE PBBBS § Sir,-*'' Mortgage Interest" is legally 3 right and. for all, I know, morally 3 right, in insisting on the sacrednefis of 3 contracts. Still on the morality point, 3 he may be interested to hear Mr Kit--3 son talking to the Iloyal Empire fcio--3' ciety last May, in the discussion on = Lord d'Abernon's address, "The 3 Economic Crisis" c S Mr Kitson said the subject was so 3 wrapped in mystery that the average 3 man knew nothing whatever about it, | and to his mind it was purposely 3 wrapped in mystery, because those in 3 control of thp finances of t the world 1 did not want public discussion. Every--3 body thought before the War that the g gold standard meant that for every 5 pound of deposits there was sold in S tho vaults of the bank to meet it. S Then came the shadow of the Great g War» and a few people went to their 3 banks, nervous and frightened, and 3 said, "Pay us what you owe us." At 3 that time gold was the mam currency. 3 What did thev find? The banks were 3 bankrupt. was not a single bank § in this country that was solvent on 3 the gold basis. That was in 1914. 2 The bankers sought relief from their 3 obligations, as thev had on three or 3 four former occasions, and asked for 1 the suspension of the Bank Act. That S saved the country and saved the a banks. Then we had the Treasury 5 notes, which represent the national a credit. . . The National Debt was S augmented ... and when thenar S was over was ... about 4/»,uw,- * 000,000. What wore those pounds P a They were not golden pounds. They 5 were not even pre-war 20-shilhng S pounds. They represented less than S 10-shilling pounds of pre-war value = "Then a committee was formed, ine S bankers actually advised the GovernS ment to restore what thev called this = gold standard, which meant compelling |- the taxpayers to repay this debt not 3 in. the pounds in wlt.ch the debt was S created, but in pounds of twice the a value 1 I say this measure was the S greatest piece of robbery this country 5 of tho world has ever known. To-day 1 you are paying interest and principal 5 in money of nearly twice the value of 2 that in which the debt was created. S You have that burden fastened on your S shoulders. It has to be borne by the S wealth producers of this country, and g the burden is too great to be s It seems only reasonable that 1W S Zealand should expect to pny its m--1 terest on War borrowings m the same 3 money that it got from the lenders. 8 It seems more than unreasonable it S seems unconscionable that by a ais--5 honest and impatriot'c trick that S money was doubled in value without I New Zealand's leave being asked It was taking one half of our produce : by the »trong hand We, are suffering 5 so severely from that action that Lord > d'Abernon says we must have relief or must default. "For the debtor |t is indispensable that he should>e able to sell his produce In order 'to pay fiia debts. If you make Ins sales impossible you render payment impossible. Thus you bring, nbout his bankruptcy t.O your own detriment." The above perhaps .gives us a new light upon the moral question in considering interest. But in the conduct of life there is a third guide beside law and morals: there ifl political sagacity. Law changes slowly, morals only as cen- , turifii go by -, not >M tjjem. mto be found help in' ourselves to changed conditions.. For th» B .wa need, first perception of the various -points of View of our classes, and, second, that refined and /elevated coramonsenso that is the wisdom or vthe statesmanThe Australian economist left our shores the other day telling US sharply that we were doing nothing whatever to get out of the slough m which we are stuck. His words were obviously meant for our financial leadera. No notice whatever has been taken of them. "Mortgage Interest is more logically right, and more insistent on his rights than j before.

Are not the wisest heads in tne world confident that its most urgent need in the remission of all war debts? For wont of »wh renission j« «« Germany in hourly danger' * ««"5 revolution and the e«tabli6httlent <K Soviet Communism. On the other side is not the touted. States a not* bed of discontent and lawlessness P AW not wars and d scontent the wiy«J desired by the Soviet Union in whjett S WW the seeds of its.destructive *v2t?£ candling help the nations, cancel ling half th«wiblid and private interest dues of New Zealand would helo our industries and reduce oar wasteful spending on unemployment. ' , Literally it would pay. ,^. Voluntary conversion of her internal deb? KSved Australia si* milium* in interest, and raised, her high in the world's esteem. N»Wtl«i««. tureel to propose it here. Yet, again I SflY* it would pay. If y New Zealand voluntarily con. verted her, internal ** in a posit an tfl ask Bngmnfl to w« & i/oonvemon of her external debt by Rnaranteein* tbe ■ new scrip. . This would be a magnificent Imperial act. S onre mor«, it would pay. A. pros, Serous Now Zealand would a« J on expanding: market tor. *'"«'»!} good-.- And a prosperous New Zealand would soon reward our *J n WJ£ ■ ietU for the sacrifices made m 1931. —Yours, etc., VATES. - ■■: