NO REPUDIATION.

Wairarapa Age, 6 July 1936, Page 5

NO REPUDIATION.

STATEMENT BY MR. NASH. PLANS FOB DEBT CONVERSION / & CONSOLIDATION. MORE COMMENTS IN LONDON. LONDON, July 3. New Zealand stocks are steadier, but according to the city editor of “Tho Times" the disturbing effects of Mr. Savage's statement have not yet disappeared. Accordingly the City welcomed a statement by the New Zealand Finance Minister, Mr. W. Nash, through the High Commissioner, Sir James Parr, denying that default or repudiation was contemplated, and explaining 1 that Mr. Savage had expressed the idea that while he (Mr. Nash) is in London an opportunity will be taken to ascertain by discussion what can be accomplised by conversion and consolidation of the Public Debt. The statement also explains New Zealand's sound financial position. ft The Times" adds that the statement should go a long way to restore the confidence of a great number of investors who have always shown a desire to invest in New Zealand stocks, which the Dominion must maintain in order to convert on the most favourable terms. Such operations, however, must be governed by the terms of the various issues. It is possible that Mr. Nash will find some considerations surrounding the question of modifying existing contracts that are not yet fully realised. The “Daily Telegraph’s” city editor hopes that the unfortunate and untimely incident will soon be closed, as a call is due on July 31 on the New Zealand loan which was advantage'ously floated on April 30. It is hoped that the affair will now be relegated to the well-populated limbo of political indiscretions. The “Daily MaiF’ expresses the hope that nothing further will be done to impair New Zealand’s credit.

FULL TEXT. SOUND FINANCIAL POSITION STRESSED. WELLINGTON, July 5. The full text of Mr. Nash’s London statement concerning overseas loans was to-day made public by Mr. Nash It reads: “The reference by the Prime Minister concerning New Zealand’s public debt domiciled in London was to the Government’s election policy, which stated that the British authorities would be asked to consider a readjustment on account of an increase in the burden of the debt, arising out of a fall in the British price level in recent years. In some cases it has been inferred from the Prime Minister’s statement that the Dominion is experiencing difficulty in meeting its obligations in London. This is entirely wrong and an examination of the financial position of the Dominion will show that such an inference is unwarranted. For instance, during the last financial year the national Budget was balanced with a surplus of £230,000 and revenues were and still are buoyant. The latest figures expressed in New Zealand currency show that exports for the 12 months ended May 31 last amounted to £52,666,000, an increase of £9,646,000 over the previous year, providing a surplus over imports of £14,284,000. The balances held by the Reserve Bank of New Zealand and by the trading banks on account of New Zealand business amounted in New Zealand currency to £40,439,000 at the end of May while the interest on the public debt payable in London at present amounts to £7,150,000 annually. Recently a prominent British economist described New Zealand’s banking position as one of ludicrous liquidity, the Reserve Bank’s reserves being equal to 96 per cent, of its notes and other demand liabilities. There is no question of the Dctninion’s ability to meet its obligations and as the Prime Minister emphasised in his statement, nothing in the nature of either default or repudiation is contemplated. New Zealand has and always will live up to its commitments. The idea expressed, by the Prime Minister was that when we are in London the opportunity will be taken to .ascertain by discussion with the parties concerned what can be accomplished by conversion and consolidation of the public debt domiciled in London.”— (P.A.)

MR. SAVAGE EXPLAINS. REPLY TO OVERSEA CRITICS. WELLINGTON, July 4. A declaration that the Government had no intention of attempting to take undue advantage of any section of the British people was made by the Prime Minister (the Rt. Hon. M. J. Savage) to-day, when making further reference to criticism directed at his announcement regarding New Zealand’s indebtedness overseas. “The editor of the ' Financial Times’,” said Mr. Savage, “refers to what he terms my 'well intentioned but dangerous ignorance,’ and says that when I realise that 'money yield governs prices’ the bother that I have created will die down. A person who is capable of making such a stupid statement is not entitled to reflect on my intelligence. "The Leader Qf the Opposition, too, is horrified at the idea that any attempt should be made to improve our position with our creditors overseas. I wonder if this is the same Mr. Forbes Whose Government, by Act of Parliament, and without conswiting those concerned, reduced rates of interest, thus breaking contracts entered into in New Zealand, lifted the exchange rate from 110 to 125, thus creating an artificial barrier against the very people for whom his heart bleeds to-day, and knocked the bottom out of agreements entered into at Ottawa and elsewhere? Is it the same Mr. Forbes who, on his return from Britain in 1932, commenced a policy of wage reductions and general deflation which wrecked the fortunes of thousands of New Zealand people, and made it impossible for them to meet their commitments on homes, farms, and other investments? What a strange state of affairs! We may destroy securities in New Zealand. We may send men to Britain to bargain with ship owners about freights. We may keep an’ expensive staff in London for the purpose of selling to the British people on the most advantageous terms. We may bargain anything but money. The field of finance is sacred, only to be trodden by the favoured few. “It ds not the intention, of the New Zealand Government to attempt to take an undue advantage of any section of the British people; that is surely borne out by our intention to send the Minister of Finance to Britain for the purpose of increasing our trading and other relationships with the Mother Country.”—'(PA.)