LONG TERM LOANS.

Poverty Bay Herald, Volume LII, Issue 17078, 6 July 1926, Page 9

LONG TERM LOANS.

j ' EFFECT OX MONEY RATES. I What effect will Hie Bank of New Zealand long-term loans at 6 per cent, (if approved by Parliament) have oil the general money market? The New Zealand! Herald evidently anticipates a considerable effect: “The general public lias also an intimate interest in the successful establishment of the enterprise. It should particularly welcome the action 1 of this great national institution in accepting the principle of long-term lend ing on the amortisation principle, which not only relieves borrowers of the anxiety and expense involved by the periodical expiry of short-term mortgages, but is also a convenient means and an effective encouragement of thrift. Such an example should commend the system to other lending institutions even more for-

eilily than the Government’s appeal for its extension in the last Budget. The general public will also await with pleasant anticipations the general effect of this lending at 6 per cent, upon money rates, and particularly mortgage rates, which cannot long remain indifferent to the standard set by the Bank of New Zealand.” Writes the Dunedin Star: “Whether the other hanks doing business in New Zealand will be content t-n continue on present lines or whether they will find it advisable to follow the lead of the Bank of New Zealand is a matter for their respective directorates to decide. It- may be taken for granted that they will at least give serious consideration to the matter.”