INTEREST RATES

Evening Post, Volume CXXV, Issue 152, 30 June 1938, Page 9

INTEREST RATES

WHO REDUCED THEM?

CLAIMS BY PARTIES

UR. COATES TWITS MR.

SAVAGE

The question of who first of all reduced the rate of interest was accorded some prominence in the debate on the Imprest Suppliy Bill in the House of Representatives last night, when the Rt. Hon. "J. G. Coates (National, Kaipara) challenged the correctness of the Government's claim that it had been responsible. He asserted with some vigour that the rate had been brought down by the previous Government.

In the. course of his speech, the Hon. Sir Alfred Ransom (National, Pahiatua) said that before Labour came into office interest rates to farmers had been reduced by a total of over £5,800,000. The present Government had merely carried on the good work. For the Prime Minister to say in his presence that the Labour Government had given the farmers cheaper money was astounding. The Minister of Finance himself had admitted frankly that the Government had buen able to hold interest rates at the level established -by the previous Government. "The only reduction I know of that the present Government has made in interest rates has been in regard to the interest on Reserve Bank funds, which has' enabled it to meet some of its obligations with cheap money," said Sir Alfred. He wondered whether the mojiey offered to local bodies fit 3i per cent, for housing came out of the same fund as the money for Government housing. If so, the Government was making' 2 per cent, on the difference. CHEAP MORTGAGES. The Prime Minister (the Et. Hon. M. J. Savage) recalled statements he had made in Pahiatua recently that more farmers today were getting cheap mortgages than ever before. Sir Alfred Ransom: Will you admit that you said that your predecessors raised interest rates and that you took them down? « Mr. Savage: I say what I said then. Sir Alfred Ransom: That is what you said. Mr. Savage: We are taking interest rates'. down all the time. Mr. Coates: You are taking them down? " " , , . , Mr. Savage: The Government is taking them down. Mr. Coates: Nothing of the kind. The Minister of Lands (the Hon. F. Langstone): Ask the local bodies. - Mr. Savage said that it was only the firm stand taken by the present Government that had kept all interesit rates down. "I said that in the Pahiatua he declared, "and I repeat it here today. I said in PEihiatua exactly what I am saying hwe. I have my notes in my hand. 1 do not get up and open my mouth and let the wind blow my tongue about. (Laugh- ; «A POOR CASE." What justification had the Prime Minister for saying that the former Government raised the rate of interest. Mr; asked. • nThe Prima-Minister hadmade; a- statement, dently based on one year—l 92- when money had been scarce and the interest rate had risen. If that was the Prune Minister's case' it was a poor onfi, and it was the worst case of misrepresentation ever perpetrated in the House. The Prime Minister had said that the last Government had raisedL the; rate of interest- and the Labour Party had Internal Affairs (the Hon.. W. E. Parry): Hear, hear! Mr- Coates: ''Hear, hear," says one individual sitting on the labour benches. Labour never reduced the Interest rate. The Interest raie was reduced by the last Government and no one else, and when the Prime Minister said that, he indulged In a piece of misrepresentation that ■will hot redound to his credit in the country. Who was it that reduce! the Interest rate? Mr. Parry: Who increased it? «WE WANT THE TROT»." *Who converted the internal loans anTJaved toe country £1,000000 in interest?" Mr. Coates asked. Was it the Labour Party? They sat on this side of the House and opposed it. Who was it provided legislation to adjust mortgages? It is no credit to the country when a Minister deliberately goes out of his way to misrepresent what has been done. I have never known of another instance where an able gentleman speaking on behalf ot the Goverment has gone J"* ■wav to make a case, when the truth is directly opposite. We want the truth, and the truth is that the last Government was solely responsible for the reduction of the not the present Government. Then wny take credit for it? r "Who was it dictated to the uov ernment?" Mr. CoateS asked. < Vho was it that dictated to the previous Government—the so-called Conservatives and Tories that members on that Side are so fond of referring to? accumulation of cases. Mr Coates asked if it was legislation passed by the Government or legislation that w.as on the Statute Book when the Government came into office that was used to readjust mortgages. The Government had certamly amended the legislation and had talked about the serfdom of being on a budget for five years, but the Government had been in office for nearly three years; and was nowhere near the end of the cases. There was an accumulation of cases the country had hardly h< Mr! W. J. Poison (National, Stratford): Fourteen thousand odd. At Dannevirke the Prime-Miniate! had taken credit for what had been done, Mr. Coates said. It was true that the Labour Party' had amended the legislation; had extended it to urban lands, but the Prime Minister had Milked of farm lands. "NOMINAL INCOME." Mr. Coates claimed that had the National Party been returned at the last election, every individual in New Zealand would' have been in a materially much better position, and real wages and real income would have far exceeded the nominal wages and nominal income at present. Also, scientific methods would have been devised sc that costs would not have been artificially raised, as they had been 'by •the blundering tactics of a Government utterly inexperienced in the conduct of the country's affairs. "The Prime Minister has been caught out, and fairly caught out, in a com Ilete mistake of fact," added Mr loates in a final reference to interest rates. "The truth is that the late Gov ernment reduced the rate of interest to 4 1-8 per cent, and arranged witl the banks to reduce the overdraft rati to 5 per cent." Mr. Coates charged the Minister ol