INTEREST PAYMENTS ON NEW ZEALAND, DEBT, ETC.

Otago Daily Times, Issue 15707, 8 March 1913, Page 10

INTEREST PAYMENTS ON NEW ZEALAND, DEBT, ETC.

SlJl —In discussing this matter, several important influences should be recognised. First of all, the debt is partly to Now Zealand institutions and individuals, in whioh-.ease so far we do not require excess of exports. The Poet Office Savings Bank has several millions lent to the State, interest payable in New Zealand; then a considerable amount of insurance and bank reserves are invested either in State or local bodies' debentures. Individuals in New Zealand also are investors to a fair amount in suoh. securities. A iarge amount of iaterest on mortgages also is payable here. ' Then there is interest paid by outsiders to New Zealand. Our finanoial institutions have to hold a considerable amount in London, generally in consols at short oall, the interest, on -which comes to' New Zealand. There are also the moneys which immigrants bring with them. • The price of exohange on London is, however, the best indicator. It is- not; high, consequently those who have to make payments in London must have funds cheaply provided there. Of course, the loams help this, but the exchanges will work'automatically, and if our exports diminish the ooet of paying for imports will become so : great that they will greatly fall off. . During the .American Civil War the exchange in New York on London was very, heavy, over 30 perccnt. if I remember aright, so that 100 dollars paid in New York only got 70 dollars in London. This sort, of thing in New Zealand will scon diminish imports and adjust the balance of trade.—l am, etc. ? Finance. [It may be desirable that we should mention, in connection with the first point made by oar correspondent, that 19.13 per cent, of the public indebtedness in 1912 had been raised in New Zealand—£l6.l3s,os4 out of a total of £84.353.913. In 1911 the indebtedness of the local bodies of the dominion was distributed as follows: Raised in New Zealand, . £18.25^.313: borrowed from - the Government. £1;429.826j raised abroad, £7,473,300.-ED. O.D.T.]