DOMINION’S DEBTS

Manawatu Standard, Volume LVI, Issue 181, 2 July 1936, Page 8

DOMINION’S DEBTS

APPROACH TO BONDHOLDERS

LOWER INTEREST RATES TO BE SOUGHT.

(Bv Telegraph.—Special to Standard.) WELLINGTON, July 1. A definite announcement that the Government intended in tho near future to make representations to money interests abroad with a view to New Zealand’s overseas interest commitments being placed on a more equitable basis was made by the Prime Minister (Air Savage) in an interview to-day.

“The rates of interest we are paying to-day belong to a Bygone age,” said Air Savage. “The whole economic structure has changed since the days when our Joans were made. The relationship of money to other things has changed altogether, and it is not an unreasonable thing for the Government, through, perhaps, the British Government, to be able to meet their creditors and see if they cannot use something like common sense—bringing equity to bear on our liabilities abroad. “Wo do not want to repudiate anything,” said Air Savage. “We want to pay those to whom we are indebted in a fair and square way. 1 do not think the British bondholder has been treated badly ami he will not be treaty badly by us. We want to pay twenty shillings in the pound, but we do not want to pay twenty-one shillings or twenty-five shillings. “I would say this: At the present time we are paying more flian it was intended we should pay when the agreements were made between this Dominion and the bondholders. There is no getting away from that, and there is no reply to that statement. They have to admit it is true. “While we are talking about agreements abroad we must not iorget that we have some at home as well, and we are breaking them to satisiy our creditors abroad. I say that we must satisfy our creditors everywhere.” Asked whether the Alimster of Finance (Hon.. W. Nash; would open negotiations on his arrival in England this year, the Prime Minister said: ‘Tvlr Nash will bounce the ball when iie gets Home. Whatever way you analyse it you win soon discover that we can only pay for things abroad with our exports. There was only one reason for borrowing the money abroad; that was because there were not enough exports to pay for the tilings we needed to purchase from there, but, if we cannot pay this year or next year, when are we going to pay? Aiany peopie do not appreciate the principle involved. We can only pay our debts by ceasing to increase them. We talk about paying our debts and for every pound we pay it is perhaps reasonable to say that we add £SO to the debt.”