PROBLEM OF FINANCE.

Gisborne Times, Volume LIII, Issue 5534, 16 July 1920, Page 5

PROBLEM OF FINANCE.

AIR. MASSEY AND THE RISING INTEREST’ RATE. AIORITOR lIJAI NOT TO BE FURTHER EXTENDED.

WELLINGTON, July 14

A suggestion that itli-e moritorimn ought to 'be extended again Avas mentioned in the House by the Prime Afinister this afternoon. Mr Massey said Parliament bad dealt with the moritorium last year and Tie thought the arrangement made then Avas satisfactory. The moritortum had been extended until the end of this year, and provision had been madle that any person who Ava-s unable then to Lice the repayment of principal or who Avas threatened with hardships could apply for relief to ■a Judge of the Supreme Couit. The cases presumably would be dealt with in Chambers and the court Avoulfi have poAver to extend the period to a date not later than the end of 1921. Air ’Massey added that something more might be done next session If that proved to be necessary. “A statement has been made,” continued the Prime Alinister, “that the government has no power to keep down th e rates of interest except in the case of loans made by the Government lending departments. That is not quite correct, since the ■government has legal poAver at present to fix the maximum rates 'of interest to he paid by local, bodies. This rate had been fixed some time, ago at 51 per cent. lam hound ip say that local bodies are having considerable difficulty in raising money at that rate.

Members: They can’t get -it. Mr Massey: They are having difficulty'. especially in the case of renewals, where large sums of money are falling due. It seems to be impossible for local bodies to borrow below 54 per cent, and sometimes it is difficult oven then. Tile, duty of the government is to keep down the rate of interest. It would bo a very bad thing for this country if the rate of interest were too high. Mr Massey added that the government had tried to prevent money being sent abroad for investment. It was very difficult to prevent this. Money did not leave New Zealand in the form of coin or paper currency. lib left in the form of produce and very often the payment for this produce was arranged to be made in London, New York, or elsewhere, but in practice a restriction on investment abroad was imposed by the. fact that the income tax was higher in nearly every other country than in New Zealand. He did not think that the people, would gain much hy sending money awav from New Zealand for investment! He hoped in any ease that, people would 1 be, patriotic, enough to invest their money in their own country. —Special Correspondent.