REGULATION OF FINANCE.

New Zealand Herald, Volume LV, Issue 16823, 13 April 1918, Page 6

REGULATION OF FINANCE.

BANKS AND THE WAR LOAN," ' RATE OF INTEREST TO BE.FIXER, - IBT TEUGBAPH—SPECIAL COB.RESPOSKsi'IWELLINGTON', Friday f||j A statement regarding the terms orj '' which banks are to advance money 0t * the accommodation of persons wishing to'-''-T subscribe to the War Loan was made bv! ; the Minister for Finance in the House & • Representatives to-day. "M _ Mr. J. C. Thomson .Wallace) said that in Australia the banks lent money at ,4' I per cent., repayable over a period of 13 \ 1 months. j -Mr. L. M. hut (ChrisUh V I asked the Minister what steps would be '' J taken to prevent a bank suddenly de. ' manding the inpayment of money adi vanced. There was a great deal of on! I easiness felt, by those who would 14 e to 'have the assistant eof the ha.ats. -\ I .Sir Joseph Ward said tne fact that 4" ' 1 per cent, was charged in Australia had come under his notice some tim affo Until a few days ago, the actual arrangeme its made by the Commonwealth Go-' I yernment with the banks were not known ' , in this country. There was a point on i which he was asking for further inJo f . ; matio.n. Here the banks charged 5} lpp ; cent., but the rate was charged on tL» , bank balances only, tie was ied to believe that in Australia the interest was charged on a fixed amount. This would not be a very much better rate than the ' New Zealand rate of 5j per cent, on bant I balances. His opinion was that the banks I should keep the rate as low as possible to enable their clients to invest in the ; War Loan, and he intended to have a ! further discussion with the banns as soon 'as possible. The object was to have tha • loan spread over as miny people as pos- ; sible, and the banks had given every* j facility to enable this to De done. *'■ I The point raised by Mr. Isitt was a, 1 more difficult one. He had not heard of any case up till now in which anyone haij been called upon in such' a way as to bs inconvenienced. The Government night have to ask for power to prevent rc.oney being sent out of the country for investment elsewhere. This had been done in Britain, and it was only prudent that in war time no money should be sent out of the country for investment abroad, except with the approval of the Minister for Finance. He thought it was important that everything in connection with the linance of the country should be under the control of the Government, chiefly for the reason that it wan essential that interest rates should be kept down. Regulations would be gazetted under the War Regulations Act in the course of a day or two relating to Government control of rates of interest.

• Sir Joseph Ward added that there were some people who had been making misstatements about the Post Office Savings Bank. There was no stronger institution in the world than the New Zealand Post Office Savings Bank, yet some persons had been trying to create an impression among' small people that if they lent money to the country they would never get it back. Mr. Hindraars'h : German spies. > Sir Joseph Ward declared that this was 1 worse than sedition.

Mr. Parr: Cannot you take action ? Sir Joseph Ward. We cannot find out ' . who the people are.' '.