“LOAN SHOULD BE GUARANTEED”

Timaru Herald, Volume CXLVI, Issue 21379, 23 June 1939, Page 9

“LOAN SHOULD BE GUARANTEED”

Press View of New Zealand’s Claims Empire Before Europe United Press Association —By Electric Telegraph -Copyright Independent Cable Service (Received June 22, 7.50 p.m.) LONDON, June 22. The “Daily Express” editorially says: "A complete change of the Government’s policy is wanted badly. They have guaranteed loans to Australia, lent to Czechoslovakia, provided funds for Turkey, and now they may make advances to Poland, Greece and Rumania. The New Zealand loan should be guaranteed. It is not just a matter of sentiment. It is ordinary business commonsense to prefer a good investment in the Empire to bad debts in Europe.”' The “Evening Standard” carries a cartoon by Low showing a national treasury nursery with Sir John Simon (Chancellor of the Exchequer), assisting as nursemaid to the fat babies—Rumania, Poland and Greece—while Mr Montagu Norman (Governor of the Bank of England), is looking at a thin baby—New Zealand —in the doorway saying: “You need slimming.” Chancellor’s Statement The Chancellor of the Exchequer (Sir John Simon), replying to a question in the House of Commons, said that the New Zealand Minister of Finance (the Hon. W. Nash) was visiting England to discuss various matters, including finance. It was not possible to comment on them till the discussions were concluded, but he was able to state that no question of a guaranteed loan arises. “Sharp Rebuff” “The Financial News” says that Sir John Simon's statement must come as a sharp rebuff to Mr Nash, but he must realise that the London market, like the British investing public, takes little account of the political complexion of borrowers. It is almost exclusively concerned with ability to pay and cannot overlook the fact that Mr Savage has pursued a three years expansionist policy endangering the debt service. It may be possible to arrange for New Zealand to meet its armament requirements by means of export credits, but conversion will have to take its chance in the ordinary way. The rate will not be loaded by doubts of the Dominion’s willingness to pay. Suggested Scheme There are suggestions that the British Government, in order to help New Zealand, will buy stocks of foodstuffs from the Dominion for emergency purposes, financing the transaction by means of three to nine month bills from the banks. As the stocks are sold, the proceeds will be used to repay the banks. Traders, however, do not consider the scheme practicable.