King Country Chronicle. Tuesday, August 29, 1933. OVERSEAS INTEREST.

King Country Chronicle, Volume XXVII, Issue 4437, 29 August 1933, Page 4

King Country Chronicle. Tuesday, August 29, 1933. OVERSEAS INTEREST.

The Southland Power Board has decided to pay its interest due in London in the depreciated currency of the Dominion, and this has aroused very adverse criticism by British newspapers. The Board contends that it is quite within its rights in this decision. Its loans are guaranteed by the Government and the Board contends that having raised the rate of exchange it should pay the difference in its interest bill as between New Zealand and British currencies, amounting to £20,000 a year. The logic of this cannot be disputed, and for the credit of the country the Government should find the amount so that faith will be kept with the English bondholders. The Board derived no benefit from this policy, and if it had to find the extra £20,000, it would have to increase its charges to consumers. If the full amount is not provided to meet this interest bill it will be looked upon by the bondholders in London as a partial repudiation of a just debt. Britain has been badly treated by marry other countries over her loans by a depreciation of their currencies, but it does not redound to the credit of any part of the Empire when they carry out a similar policy. The Southland Board is quite within its legal rights in paying overseas interest in the depreciated currencies, and if it adheres to this policy the Government will have no alternative but to make up the difference. This is only one of the penalties which this country has incurred by tinkering with the rate of exchange.