UNDER THE GUILLOTINE.

Timaru Herald, Volume CXXXIV, Issue 18832, 21 March 1931, Page 17 (Supplement)

UNDER THE GUILLOTINE.

INTEREST REDUCTION BILL. United Press Association—By Electrla Telegraph—Copyright SYDNEY, March 20. The State Assembly passed the Interest Reduction Bill under the guillotine, and the measure was read a first time in the Council.

BURDEN OF WAR DEBTS. REASON FOR REPUDIATION. Mr Lang's Interest Reduction Bill is designed to reduce the rates of interest payable in New South Wales, also to amend the Claims Against the Government and Crown Suits Act of 1912 and certain other Acts. Commenting on the situation last week a Sydney paper said: If Mr Lang carries out his threats to suspend interest payments, April 1 will be April Fool’s Day In earnest for London bondholders. On that date sums of £542,000 and £186,000 are due in London. A payment of £125,000 is also due in New York, but it is not anticipated that Mr Lang will repudiate any debts to America. New York bondholders in that case would receive preferential treatment over British investors.

Though the burden of war debts has been advanced as a reason for repudiation, the payments due on April 1, totalling £853,000, arfe interest on money borrowed and spent on public works and services in New South Wales. Of a total of more than £39,000,000, the bulk was borrowed at 5 per cent., but £12,425,000 was a 3 per cent, issue. The money was raised under Acts passed in 1912, 1914 and 1923 by the McGowen, Holman and Fuller Governments. It is not possible to trace from the public accounts the particular works on which the money from a specified loan was spent, but the 1923 Act covered loan estimates of nearly £11,000,000, including hospitals, railways, country water supplies, the city railway system and harbour bridge work. The Act of 1914 covered public works and services, including £40,000 for the purchase of State trawlers.

Bondholders who lent New South Wales money to carry out the costly experiment of the State trawling enterprise apparently will be asked to share in the loss on that disastrous venture.