MONEY ON MORTGAGE

Dominion, Volume 22, Issue 138, 7 March 1929, Page 12

MONEY ON MORTGAGE

DROP IN INTEREST RATES NO' REDUCTION IN STATE ADVANCES ■ Dominion Special Service. Christchurch, March 6. The recent statement of a Wellington banker to the effect that the mortgage rates must fall unless the Government raises a loan within the Dominion, were referred to by Mr. David Jones, M.P., in an interview with a representative of the “Press” to-day. Mr. Jones said that undoubtedly the rate of interest was falling, and it was highly interesting that the lending institutions and individuals, in their desire to keep up the rate, would like to see the Government borrow in New Zealand. He had stated, when speaking in the House on the Finance Bill last session, that the statement by Sir Joseph Ward that he intended to make a complete reversal of his policy and borrow in the Dominion, would keep up the rate of interest. It had that effect, but money was accumulated again, and if supply and demand were allowed free play mortgage rates of 5} per cent, would become general. “Some mortgages,” said Mr. Jones, “have already been arranged at this figure. The extraordinary thing is that the Government, which may be referred to as a commercial Government, went into office as a cheap money party, and now appears to be playing right into the hands of the money-lenders. No institution that the Government is interested in or could influence has attempted to break the present high rate. It is the private lender that is breakiiig.it. “The Government borrowed the money in London at the rate they stated at the election owing to the sound Reform finance and reputation. This money was promised to the settlers and .workers at 4} per cent, by the perambulating Ministry. This rate, according to their promises, should have been in operation since January, and members are receiving anxious inquiries from disappointed would-be borrowers, but nothing has been done. The State Advances Department and Rural Credit branch have not even reflected the drop in interest, but are up to and beyond the rates at which private mortgages are being negotiated. There is nothing that would assist the producers more than a drop in interest rates, and the Government should have led the way instead of sitting on the brake.”