INTEREST RATES

Evening Post, Volume CXX, Issue 99, 23 October 1935, Page 18

INTEREST RATES

EFFECT OX EECOYERY

REPLY TO MR. APPLETON

"No one, be he business man or poli-l tical aspirant, can gainsay the fact that I the success of the Government's policy of bringing about lower interest rates has been a powerful factor in aiding the economic recovery of the Dominion," stated the Rt. Hon. J. G. Coates at Khandallah last night, in reply to a statement made by Mr. Will Appleton, Independent candidate for Otaki. "The conversion of our internal indebtedness, both Government and local body, has had a marked influence on interest rates generally, the effect havi ing permeated through all avenues of investment resulting in an era of cheaper money not only for the primary producer, but also for industrial purposes generally. "The gap between costs and income may be said to have been practically bridged, and in achieving this result the Government may rightly claim credit for having successfully shepherded the Dominion through the very trying period of the depression. "To charge the Government with an attempt to maintain what Mr. Appleton describes as the fictitiously low rate of interest to delude the people into the belief that the Government had done so much in the way of reducing interest charges calls for little, if any, comment from me. The-results surely speak for themselves, and it is obvious to any thinking person that the Dominion's finances could not be in the position that they are today were it not for the action of the Government in the matter of reducing the burden of interest charges. "Mr. Appleton in his criticism directed attention to the portion of the Public Debt maturing 1952-55, stating that whereas the amount at the close of the financial year 1933-34 was £11,175,530, the year 1934-35 closed with the figure af £10,656,740. '' The question is asked regarding the reduction of £518,790, and in explanation I would refer him to the' published accounts wherein the transactions relating to the debt operations are fully set out.

"In this particular case an interdepartmental transaction relating to £520,000 1952-55 stock took place whereby the stock was converted at part into longer-dated stock of the same face value, there being no question of premium to be accounted for in that the public finances of the Dominion were not in any way affected by the rearrangement of the investment for departmental convenience. The difference is quoted by Mr. Appleton as £518,790, and the apparent discrepancy is accounted for by securities to the value of £1210 having been converted during the year under the New Zealand debt conversion operations—in effect, belated transactions."