LEVEL OF INTEREST

New Zealand Herald, Volume LXIX, Issue 21347, 23 November 1932, Page 12

LEVEL OF INTEREST

LOWER RATES NEEDED

MR. FORBES' DECLARATION

CHARGES STILL TOO HIGH

GOVERNMENT CONSIDERATION

[by telegraph—special reporter] j! WELLINGTON, Tuesday "I know from tho position of tho Government's finances that next year will be the most difficult in the history of this country," declared the Prime Minister, the lit. Hon. G. W. Forbes, to-day, in replying to a deputation representing importing and commercial interests, which approached him to protest against the move for a higher exchange rate. Mr. Forbes said the position facing primary producers was becoming increasingly complicated and that fact could not be disguised.

"Wo have got to take steps to enable ns to increase our revenue so that we will be able to meet our obligations," La said. "Wo must lighten the- burden of our overhead charges. "Although the Government has not as yet come to any decision regarding a reduction of costs," continued Mr. Forbes,

"there is no doubt that interest is too

high. Interest charges are one of the s most pressing burdens, and this is one of the matters into which we shall go when Mr. Downie Stewart comes back with a view to seeing if something cannot be done to lighten the load. If we do not lighten the load, we are going to get into far greater difficulties than ever before."

Mr. Forbes said that whatever action was taken would cause some hardship and would give rise to many objections. Many schemes for currency reform were being proposed, and these were gaining ground among farmers. Farmers, however, were now turning to high exchange as a safer way to relieve the burden. A .Voice: Do you not think that is •ntirely a selfish claim ? Mr. Forbes: I have not yet been able lo find an entirely unselfish man. Discussing the scheme for a bonus on •xports, Mr. Forbes said the question arose whether any meang should be adopted which would leave the settlement of the account to be made 20 years hence. In any event, no one had suggested ihat a loan for bonus purposes should be raised at anything below the ruling ?ate of interest. At present the Government could not 6ell its bonds over the sounter at less than 5 per cent interest, whereas Australia was raising money at per cent. It;would be more to the point, he suggested, if those comprising the deputation conld support the raising of an internal loan for export bonuses' at, say, i per, cent. Mr. E. Salmond and Mr. T. C. A. Hislop (together): It is worth trying. ' Mr. Salmond said he was sure that *n appeal for money at a low rate of (nterest. would be met by the people of New Zealand. Farmers themselves, he pointed out, were not unanimous on ex- ' thange inflation.