RATE OF INTEREST

Greymouth Evening Star, 13 August 1920, Page 5

RATE OF INTEREST

LOCAL BODIES.COMPETING

IN LOAN RAISING

PREMIER'S STATEMENT.

(Special to the "Star.")

WELLINGTON, This, Day

"If I did away with the limitation of tlie rate of interest paid by local bodies we would have interest up to 8 per cent, w.thin a few weeks declared Mr. Massey to-day, # when this question was raised by Mr. Hainan, who later urged the Government to consider the effect upon the money market of allowing an increased rate of interest to be paid by local bodies, and of per mitting them to outbid each other in raising loans. He thought it desirable to group all the local bodies loans through the Government. Mr. Massey agreed that there is barely a local body that was not raising loans at the present time. The Government had come to tlie conclusion that no local body should pay more than 5Jj per cent. He thought it unwise of local bodies coming so much into competition. If they would wait patiently until labour and material became more plentiful, they would be better off. He had seen a cable from England stating that a large reputable firm was offering ten' per cent, for loans and if that sort of thing obtained in England, it would have an effect here, except for the fact that fortunately New Zealand seemed to have sufficient money in the country to meet its requirements so long as we could keep it in the country.