OVERSEAS LOAN INTEREST

Evening Star, Issue 22383, 6 July 1936, Page 1

OVERSEAS LOAN INTEREST

CONVERSION AND CONSOLIDATION DISCUSSIONS WHAT PREMIER’S REFERENCE MEANT IPeh United Press Association.) WELLINGTON, July 5. The full text of the Hon. W. Nash’s London statement concerning overseas loans was to-day made public by Mr Nash. It reads;— “ The, reference by the Prime Minister concerning New Zealand’s public debt domiciled in London was to the Government’s election pqlicy which stated that the British authorities would be asked to consider a readjustment on account of the increase in the burden of debt arising out of the fall in the British price level in recent years. In some cases it has been inferred from the Prime Minister’s statement that the Dominion is experiencing difficulty in meeting its obligations in London. This is entirely wrong, and an examination of the financial position of the Dominion will show that such an inference is unwarranted. For instance, during the last financial year the national Budget was balanced with a surplus of £230,000, and the revenues were and still are buoyant. The latest figures, expressed in 'New Zealand cux-rency, show that the exports for 12 mouths ended May 31 last amounted to £52,666,000, an increase of £9,646,000 over the previous year, providing a surplus over imports of £14,284,000. The.sterling balances held by the Reserve Bank of New Zealand and by the trading banks on account of New Zealand business amounted in New Zealand currency to £40,439,000 at the end of May, while the interest on the public debt payable in London at present amounts to £7,150,000 annually. “ Recently a prominent British economist described New Zealand’s banking position as one of ludicrous liquidity. The Reserve Bank’s reserves being eqi|al to 96 per cent, of its notes and other demand liabilities, there is no question of the Dominion’s ability to meet its- obligations, and, as the Prime Minister emphasised in his statement, nothing in the nature of either default or repudiation is contemplated. New Zealand has and always will live up to its commitments. The idea expressed by the Prime Minister was that when we arc in London opportunity will be taken to ascertain by discussion with the parties concerned what can be accomplished by the conversion of the, public debt donitdnea in London."’ " ' • '