LOWER INTEREST

Evening Post, Volume CXV, Issue 58, 10 March 1933, Page 8

LOWER INTEREST

GOOD .TIMES IN SIGHT

(Contributed.) The financial world has been lopsided for a long time, not only in New Zealand but throughout the whole world. The harmony had become a discord; there was no true note. It was as if a musical leader had sounded a note in a key that was too high; and the orchestra jmt down their instruments and ceased playing. Everywhere in New Zealand men who were waiting for a lead in business have 1? ne Y e same tUng as the orchestra— they have ceased operations because the rate of interest was too high. There are signs that this inaction will soon be over, and once the loan conversion is out of the -way, it is expected that there will be a general loosening of capital i which will become available for industrial and other activities. This will mean more work, and none will be happier to hear iof this than the young men of New Zealand, who for nearly two years have had j little opportunity to launch out in life. One reason for the high rate of interest was that the world was prosperous and money was needed for many great enterprises, both private and public. Then the war came and further upset matters financial. So in the last twenty years the rates of interest on Government loans steadily increased till these gilt-edged securities carried interest which was not warranted in such safe investments. Investors do not hope for a high' interest •where there is no risk. On the other hand, from such investments as second mortgages, mining shares, and such, high returns were needed to compensate for the risk of the investments. The return to lower rates of interest has been going on throughout the Empire during the last two years, and New Zealand is one of the last countries to embark on a concerted plan to reduce interest. The absolute necessity for action, however, has culminated in the loan conversion scheme, which is now being, carried to success. The anomaly of the financial position is that there are ample funds held by. companies and private individuals to start the wheels of industry running at full pressure. Where thwe is a will there is a way; though the way has been clouded by the discord which has prevailed. But it will now be evident to all, since the high interest problem is being solved by the conversion o£ the country's internal loans to_ a flat rate of 4 per cent. That is the keynote of the financial situation in New Zealand, the true note which men have been waiting for; and it is a fair note, well within the reach of all the players. Soon the orchestra of industry will be in full swing, working to the key which the stabilisation of interest through the loan conversion has sounded. It behoves all bondholders to join in the harmony, the growing volume of which is i seen in. the streams of loan conversion acceptances which; are being received by the Treasury every day.