THE PRICE OF MONEY

Evening Post, Volume CI, Issue 19, 22 January 1921, Page 4

THE PRICE OF MONEY

"It is the duty of the Government to keep the rates of interest down," said Mr. Massey to the deputation from the Borough Council of New Plymouth. The request was made that that body should be empowered to. borrow at 6 per cent, for certain important electric works. It had done its utmost to obtain money at Si per cont., the legal maximum, and failed. -What-to do?" All Mr. Massey could promise the- deputation wa* that the points it had raised would be taken 'a to consideration. The most of those salient ; points -was that money for municipal undertakings similar to the electrical enterprise of Now Plymouth is not to bo had at 54 per cent. This point -was sharpened on the, very day before the deputation met the Finance Minister, when the banks raised their deposit and overdraft ratos. One has only to look at the English daily papers to see howr difficult it is to rasa money outside New ■ Zealand at 5^ per cent., or even 6i per cent., for local government purposes. It may be'"the duty of the Government to keep the rates 'of interest down," but their tendency is to rise all tlie same. There is only one of two courses open : I either to increaso the rate, or to defer borrowing until the money market' is easier. In any case there is but a limited amount of money available in New Zealand, for all purposes, local and otherwise ; nor will there be more until more is earned by production and export of the fruits of the soil. Borne works, ,• of course, cannot stand still. If very serious loss is to be avoided, they must go on/ no matter what the price of money may be. Is the New Plymouth undertaking one of these? l£ is for the Finance Minister and his advisers to satisfy themselves'on this point.' There may be similar local ventures requiring urgent expenditure; but if permission to raise the rate of interest is given at all, it should only be done after the most exhaustive, investigation has been made into the character and urgency of the work. *