PRICE OF MONEY.

Marlborough Express, Volume LIV, Issue 165, 15 July 1920, Page 5

PRICE OF MONEY.

GOVERNMENTS POWER OF

OONTTtOL

[frx>m our correspon dent.j

WELLINGTON, July 14

A suggestion by tho Member for Wellington North that the Government should regulate- the rate of interest by preventing the withdrawal of money from New Zealand drew.-1 an interesting comment from the Prime Minister j who also showed the position of the moratorium. Its term was extended until December 31st of this year. After that date mortgagors would have to go to a Supreme Court Judge if they wished to .secure relic ffrom hardship, when a renewal of the term might be arranged. That was the present position, and as far as Parliament could go, but next session, if it became necessary, something further would be done.

Mr McCallum: "It can's be extended beyond December 31st next

3 Tear." Mrl Masscy: "That is so. It has been said that the* Government has no power to keep down the rate of interest, except in the case of loans from Government Departments. That is not quite correct, because when local bodies desire to borrow they have to state the rate of interest they desire to pay, and if it is higher than the Government thinks wise, permission is not given. Some time ago we fixed 5$ per cent., but I am bojund to say that the local bodies, find it difficxilt to get money at that rate, and they have some difficulty in arranging renewals at 5£ per cent. It is our duty to keep down the rate of interest, "and it will be a hard thing if it gets beyond a reasonable amount."

The Prime Minister added: "It is difficult to prevent the export of money, as New Zealand exports produce which is paid for in other countries, but as the income tax is higher in England aftd * Australia, there is no advantage to send money from New Zealand to these countries." He hoped that those possessed of capital would, whatever the temptation, be patriotic enough to invest their money in New: Zealand.