INTEREST RATES

New Zealand Herald, Volume LXXIII, Issue 22464, 7 July 1936, Page 12

INTEREST RATES

LOANS IN LONDON COMMENTS OF LABOUR PRESS [by telegraph —press association] WELLINGTON, Monday The following is an extract from a cablegram dated July 2, received by the Minister of Finance, the Hon. W. Nash, from the New Zealand High Commissioner in London: —"'lhe Daily Herald says there was only a minor decline following Mr. Savage's statement (on the question of ovei'seas loan interest), and recalls that there is unlikely to be any forcible reduction in interest, as the intention is to approach investors through the British Government. "Tho paper recalls that one reason advanced is 'that the whole economic structure has changed since the loans were made, and therefore it is not unreasonable for the Government to meet the creditors with a view to securing equity,' and 'that such a reason is unlikely to receive much sympathy in investment quarters, but the fact remains that New Zealand is only raising an issue which has been frequently advocated in these columns, in connection with the non-convertible issues of British municipalities.'

"Even City opinions are veering round to the view that there is no necessity for money rates to rise again as in the war and post-war period. If such bo the case every consideration should be given to a legitimate approach for alleviation, provided it is not accompanied by foolish threats. If Mr. Savage succeeds in making out a good case for New Zealand he will have done yeoman work for other debtors, such as British municipalities. Once the principle is recognised, untold millions of money now going in high interest could bo realised for new projects, with permanent improvements in business activities and further relief for unemployment." Tho Daily Express, editorially, says: "Empire interest rates are too high, and if anybody's business is going to be shaved the bondholders are due for the first operation."