OVERSEAS LOAN INTEREST

Press, Volume LXXII, Issue 21827, 6 July 1936, Page 10

OVERSEAS LOAN INTEREST

“NO UNDUE ADVANTAGE SOUGHT”

MR SAVAGE DEFENDS HIS PROPOSAL [TH£ PEBSB Special Service.] WELLINGTON, July 5. Further replies to criticism both in London and New Zealand of his views on overseas interest rates were made yesterday by the Prime Minister (the Rt. Hon. M. J. Savage). Criticism in the London “Financial Times” and comments by the leader of the Opposlloin (the Rt. Hon. G. W. Forbes) were specifically answered by the Prime Minister. “The editor of the ‘Financial Times refers to what he terms ‘my well-in-tentioned but dangerous ignorance and says that when I realise that ‘money yield governs prices the bother that I have created will die down, said Mr Savage. “A person who is capable of making such a stupid statement is not entitled to reflect on my intelligence. . . “The leader of the Opposition, too, is horrified at the idea that any attempt should be made to improve our position with our creditors overseas. *1 wonder if this is the same Mr Forbes whose Government, by act of Parliament and without consulting those concerned, reduced rates of interest, thus breaking contracts entered into in New Zealand, lifted the exchange rate from 110 to 125, thus creating an artificial barrier against the very people for whom his heart bleeds to-day, and knocked the bottom out of the agreements entered into at Ottawa and elsewhere?

“Is it the same Mr Forbes who, on his return from Britain in 1932, began a policy of wage reductions and general deflation which wrecked the fortunes of thousands of New Zealand people and made it impossible for them to meet their commitments on homes, farms, and other investments? “What a strange state of affairs! We may destroy securities in New Zealand, we may send men to Britain to bargain’ with shipowners about freights, we may keep an expensive staff in London to sell to the British people on the most advantageous terms, we may bargain everything but money. The field of finance is sacred, only to be trodden by the favoured few.

“It is not Hie intention of the New Zealand Government to attempt to take an undue advantage of any section of the British people. That is surely borne out hy our intention to send the Minister for Finance (the Hon. W. Nash) to Britain to increase our trading and other relationships with the Mother Country,” he added.