INTEREST RATES

Evening Post, Issue 154, 1 July 1936, Page 10

INTEREST RATES

OVERSEA LOANS

"BOUNCING THE BALL"

MR. NASH TO DO IT

REDUCTION MOVE

The definite announcement that the Government intended in the near future to make representations to the money interests abroad with a view to securing New Zealand's overseas interest commitments being placed on a more equitable basis was made by the Prime Minister (the Rt. Hon. M. J. Savage) in an interview today. "The rates of interest we are paying today belong to a bygone age," said Mr. Savage. "The whole economic structure has changed since the days when our loans were made. The relationship of money to other things has changed altogether, and it is not an unreasonable thing for the Government, through perhaps the British Government, to be able to meet its creditors and see if they cannot use something like common . sense—bringing equity to bear on our liabilities abroad.

"We do not want to repudiate anything:," said Mr. Savage. "We want to pay those to whom we are indebted in a fair and square way. I do not think the British bondholder has been treated badly; and he will not be treated badly by us. We want to pay twenty shillings in the pound, but we do not want. to pay twenty-one shillings or twenty-five shillings.

"I would say this: at the present < time we are paying more than-, it was i intended we should pay when the < agreements were made between this 1 Dominion and the bondholders. There i is no getting away from that, and there < is no reply to that statement. They ; have to admit it is true. While we are talking about agreements abroad we must not forget that we have some at home as well, and we are breaking them to satisfy our creditors abroad. I say that we must satisfy our creditors everywhere." MR. NASH'S VISIT. Asked whether the Minister of Finance (the Hon. W. Nash) would open negotiations on arrival in England this year, the Prime Minister said: — "Mr. Nash will bounce the ball when he gets Home. Whatever way you analyse it you will soon discover that we can only pay for things abroad with our exports. There was only one reason for borrowing money abroad; that was because there were not enough exports to pay for the things we needed to purchase from there. But it we cannot pay this year or next year, when are we going to pay? Many people do not appreciate the principle involved. We can only pay our debts by ceasing to increase them.: We talk about paying our debts, and for every pound we pay. it is, perhaps, reasonable to say that we add £50 to the debt." j