INTEREST ON BONDS

Taranaki Daily News, 29 March 1932, Page 8

INTEREST ON BONDS

DANGER OF REDUCTION.. ALTERNATIVE SUGGESTION. “At the present time we in New. Zealand are assailed on all sides by cries of defeatism and despair,” stated an Auckland business man when discussing the interim report of the National Expenditure Commission. “Politicians, economy commissions, the president of the Auckland Chamber of Commerce, and the president of the Accountants’ Society have all joined, in the cry that our only method of saving the situation is to repudiate contracts, making a wholesale and all round reduction of interest and rents without taking into consideration the ability of the parties liable to pay. “The majority of these utterances do not take into consideration the fact that adjustments have been made and are still being made voluntarily between the parties interested. They apparently. do not desire to look further than the immediate present, and are not prepared to take into account what will happen, in the future if they succeed in destroying the confidence of investors and the. public generally. If the Dominion was in the position of being hopelessly bankrupt then by all means let it call its creditors together, but is it not . crying out for ,someone to take a firm grasp of the situation? The example of Britain is a case in point. “The Government should bring down a statement immediately showing exactly its deficit and estimated deficit, and also the savings it proposes to. effect in its administration costs. If it then made an appeal to the public on patriotic grounds asking for voluntary subscriptions to an internal loan 'at a reduced rate of interest, at say 4 per cent., or even 3£ per cent., setting out in the prospectus exactly the purpose for which the loan was required, is it not conceivable that just as the country cheerfully undertook its obligations during the war, so it would be prepared to shoulder its burden now ? . “Concurrent with such a loan proposal, all it would be necessary for the Government to say is, ‘We feel that the country can pay its way, we are going to honour our obligations, we are not goin" 1 to give legal authority to repudiation of contracts, and we are satisfied that .the country is at heart sound, and these steps will save it.’ If the response to ■ such an appeal did not enable the Government to carry on, then surely it would be time enough to consider the proposals of repudiation .and despair. . “The crying need of New. Zealand today is confidence, and it is only, necessary for the Government to display some belief in the country’s future to encourage the, community to take up its share of the burden.”