INTEREST AND RENTS.

Press, Volume LXVIII, Issue 20494, 12 March 1932, Page 14

INTEREST AND RENTS.

A 20 PER CENT. REDUCTION. government to introduce LEGISLATION. [From Our Parliamentary Reporjer.J WELLINGTON, March 11. Recognising the necessity for reductions in fixed money charges and for an equitable distribution of the generally lowered costs over the whole community, the Government has drafted legislation providing l'or an arbitrary reduction of interest and rent by 20 per cent. This policy, which follows the lines favoured in the advisory report of the Economists Committee, will affect interest on mortgages, debentures, deposits, and dividends from shares and securities of this kind. The Government lias been accused lately from within Parliament and from outside of timidity in handling this difficult subject. A most exhaustive investigation has been made of the position, however, and the. lead given by the economists and later by the Economy Commissioners has been adopted" by Cabinet as one of the most important pieces of legislation for passage this session. In suggesting the advisability of 20 per cent, reduction, the economists said this adjustment would make a substantial contribution toward bridging the gap between costs and prices. Similar sentiments were expressed by members of the Economy Commission, whose report was tabled to-dav. Although not making any specific recommendation so far as private interest and rent were concerned, the Commissioners considered this question should be treated along with the State and local body interest problem. In aiming for a general equality of sacrifice, the Commissioners recommended safeguards for hardship- and the establishment of simple and inexpensive machinery for handling the subject. Both the economists and the Commissioners were agreed that the natural economic forces would operate too slowly in adjusting private interest and rent. The Government's Bill will have a far-reaching effect and is calculated to assist not only the farmer but other classes of the community upon whom the burden of large interest bills is falling very heavily, particularly where incomes have dropped to any serious extent.