INTEREST ON LOANS.

New Zealand Herald, Volume LXVI, Issue 20426, 30 November 1929, Page 13

INTEREST ON LOANS.

MR. SNOWDEN EXPLAINS.

CONTRACTS TO BE OBSERVED

British Wireless.

RUGBY, Nov. 8)

A number of questions were asked today in the Housfe of Commons regarding the statement which was made in the course of the debate on the Unemployment Insurance Bill by Mr. Tom Shaw, Secretary for War. ■■

Mr. Shaw referred to the mention made by Mr. Lloyd George of the crushing weight of social services, but he said that under Mr. Lloyd George's Government, and under every other Government, a policy had been pursued which had led Britain into paying at least £100,000,000 per year to people who., had not the slightest right to if;. During the war Britain had borrowed money at inflated rates and. adopted, after the war, a financial policy of. deflation. Now she was paying interest on the deflated money. That was the fact that had to be faced before the country could be put on its feet again.

Mr. Shaw's statement created some surprise, as seeming to indicate a desire to interfere with the terms on which war loan stock was held. Mr. Snowden, replying to questions on the subject to-day, effectively disposed of any such suggestion. He said the Government had no intention of varying the contractual obligations entered into with the holders of Government securities.

The condition of all Government loans ■was that the Government had the option of redemption on specific dates, and of course could take advantage in the interests of the taxpayers of any favourable opportunity of redeeming the loans, or converting them at a lower rate of interest.