20 PER CENT. REDUCTIONS.

Evening Star, Issue 21080, 18 April 1932, Page 9

20 PER CENT. REDUCTIONS.

TO TH« EDITOR. Sir,—The 20 per cent, reduction in rent is immensely more drastic than the so-called 20 per cent, reduction s interest. The 20 per cent, reduction in rent is compulsory down to an equivalent of 7 per cent, of the capital value of the property rented. In other words there will he practically no exemptions. But what of the so-called 20 per cent, reduction in interest? (1) The banks are exempt. They, forsooth, are reducing their rates £ per cent.—that is, from 7 per cent, to 64 per cent, in most cases, approximately a 7 per cent, reduction. (2) The minimum reduction is to be to 5 per cent, for all other lenders. (3) The bulk of money lent is first mortgage, and the ruling rate about 6 per cent. The reduction to 5 per cent, represents a reduction of 16 2-3 per cent, (4) All rates lower than 6 per cent, (and there are many thousands of pounds lent below this figure) are to bo reduced only to 5 per cent.—e.g., a present mortgage at 5J- per cent, reduced to 5 per cent, is a reduction of about 9 per cent, (5) The apparent equality is really most inequitable and oppressive adjustment, all on the side of the banks and money-lending institutions. (6) In England tho bank rate has just been ■ reduced to 31 per cent.; ours is 6-)- per cent. Why the tremendous disparity? I can find no other reason than that the Minister of Finance and his colleagues are absolutely dictated to and dominated by the banks, and at such a crucial time the borrowing public, especially those who have borrowed to be landlords, will wake up too late. Our only hope is to enlist tho help of the malcontents in the Coalition Party to take up tho question at once.—l am, etc., Boscawen.; April 18.