INTEREST RATES

Hawke's Bay Tribune, Volume XXVI, Issue 236, 18 September 1936, Page 6

INTEREST RATES

Reaction to Statement by Mr. Savage

N.Z. CREDIT IN LONDON

Among the financial people of England there is a feeling of a good deal of alarm regarding the activities of the Labour Government in New Zealand, said Mr 11. M. Campbell, of Poukawa, who has returned from a visit to England and Scotland where he had the opportunity of meeting those who are interested in the Dominion’s financial affairs.

“When the English papers reported Mr Savage’s alleged utterances in regard to the reduction of interest on overseas loans,” said Mr Campbell, “there was a general feeling all over the City that New Zealand’s credit was not what it had been in the past. This was reflected on the Stock Exchange by the immediate drop in price of a certain number of New Zealand stocks. Ono prominent individual in the financial world pointed out to mo that practically every loan had changed hands one or more times since it had been issued, many of the buyers buying at a premium because money had become cheaper and harder to invest. They looked upon New Zealand securities, because of the way the slump had been handled and met here, as being excellent. Therefore they gave premiums for parcels of these loans, which meant that their net return was quite small.”

Mr Campbell said that any suggestion of a reduction of interest would be extremely hard on these purchasers, many of them having invested only a few thousand pounds in the stocks, but these few thousand meant a very great deal to the a whole life’s savings and the nest egg for his or her old age.