RATES OF INTEREST.

Manawatu Standard, Volume LI, Issue 204, 30 July 1931, Page 5

RATES OF INTEREST.

LOCAL BODIES’ LOANS. Speaking in the House of Representatives on the Local Authorities Loans Rates of Interest Bill, Mr J. A. Nash said he understood that the object of the Bill was to give effect to the proposal made by the Prime Minister some time ago that there should be a reduction in interest rates. There was provision in the Bill for the local bodies, but they would require to be brought into line by Act of Parliament. An objection raised by the member for Egmont was met by, clause 4 which provided that the Minister of Financo might grant exemptions from the restrictions imposed by the Act. There could be no question that in many instances, particularly in the case of the smaller local authorities, as the Prime Minister must realise, it would he impossible to raise money at 5 per cent. At the present time many local authorities were paying up to 6 per cent. Larger bodies were paying 5i per cent, and 5J per cent. If the rate voluntarily came down throughout the Dominion by one-half per cent, it would benefit everybody. Therefore, it was essential that Parliament should deal with the question of local authorities, with the safeguard that they should be protected if they were unable to carry out their finance under the restrictions placed upon them by the Government at 51 per cent., and which in the case of a small, local body would be an impossibility in view of the fact that Government bonds and stocks were being so’d over the counter at that rate. The Minister _ had, therefore, wisely made provision in the Bill to provide for these smaller local bodies. Under the circumstances, therefore, the Minister should not he hindered in this matter, but should be helped. The Bill should be passed straight away so as to help the Prime Minister with the other matters lie had in hand. BUILDING SOCIETIES. Per Press Association. WELLINGTON, Jiily 29. The principal building societies in the Dominion have agreed to lower the rates of interest paid on deposits by 1 per cent, as from August 1. A corresponding reduction will be made in the rates of interest on new loans made by societies. The reductions are conditional upon other financial institutions acting similarly.