The Southland Times PUBLISHED EVERY MORNING. "Luceo Non Uro.” FRIDAY, DECEMBER 1, 1933. MORE TINKERING

Southland Times, Issue 22187, 1 December 1933, Page 6

The Southland Times PUBLISHED EVERY MORNING. "Luceo Non Uro.” FRIDAY, DECEMBER 1, 1933. MORE TINKERING

It is not unfair to regard the Government’s amendment of the new Local Authorities’ Interest Reduction and Loans Conversion Act as a tinkering rendered necessary by other tinkering. No matter what the Government may say about the necessity for interest reduction, there can be no argument upon the point that it has brought about a reduction in interest on loans, and incidentally has thereby diminished the value of the capital invested therein, by a stroke which makes a reduction, necessitated by temporary conditions, a permanent thing. When the Government found that those who had elected to take the payment of interest at some place outside New Zealand had evaded the provisions of the Act by selling their securities to non-New Zealanders, the Government found it necessary to make special arrangements that would ensure that such sales would not be encouraged. There is no doubt that many people who were in a position to transfer their securities overseas were able to avoid the effects of the interest reduction legislation and therefore to escape a burden which their fellow citizens had to bear. It would be interesting to know, too, if these securities, where the interest had to be paid in London, were paid in New Zealand currency. It would depend, of course, upon the actual wording of the bond, but if in all cases this transfer to London involved a payment in sterling instead of New Zealand currency, then those who were evading the Government’s efforts to reduce the interest on their bonds would receive a double benefit: Acting under the excuse of expediency, the Government has interfered with contracts all over the place, and where it could accomplish its purpose it has reduced interest ruthlessly without any regard for the suffering inflicted upon small people who, with implicit faith in the State, had invested their money in Government bonds. But where, owing to legal barriers, it could not achieve its purpose, it assumed an attitude of eloquent piety while it sang its devotion to the sanctity of contracts. This latest amendment exempts from the 20 per cent, reduction those securities which were sold in London prior to the Act coming into operation. This has to be done so that local bodies who wish to carry through conversion schemes may include these securities in their operations. This empowering amendment is necessary because otherwise any transactions involving these particular securities would be repugnant to the original legislation and to the Government’s arrangements made to prevent those who had escaped the reduction of interest by transfer to London. This latest step is necessary and must be taken in order to assist local authorities, but the historian will include this among the evidence of the difficulties which beset the Government when it proceeds to interfere in financial matters and to poke its <

nose into what, after all, are private matters, which should be beyond the ken of the National Government.