EMPLOYMENT AND MONEY RATES

Press, Volume LXXIV, Issue 22504, 12 September 1938, Page 4

EMPLOYMENT AND MONEY RATES

TO THE EDITOR Ot THE eRB&~. Sir, —I have for some time noticed in the reports of many local bodies one. fact which. I feel sure many of your readers will appreciate. While many local bodies are willing to undertake considerable works programmes, giving employment to many men, they are hampered by one necessity—the money to pay for the work. The Local Bodies Loans Board gives permission for the raising of loans at 3J per cent, interest; but unfortunately lenders are not willing to accept such a low rate. £bi« is not to

be wondered at when Government stock, which is considered a better security by many investors, can be purchased on the stock exchange to give a return of at least 3f per cent. Other local body debentures, subsequently converted to 4J per cent., are obtainable to give a return to the Investors of from 3J per cent, to 4 per cent. In spite of these facts the Labour Government expects to stabilise local body interest at 34 per cent, and expects that the Investor will be philanthropic enough to accept ,3J per cent. It is not possible to regulate interest rates internally in a country like New Zealand when other investments are- available, returning anything up to 7 per cent., according to the degree of risk the investor is willing to take. In any case the current interest rate in Australia has an influence on the New Zealand rate. Investors in these modern times have many choices of investments, both internal and external, and any government which thinks it can dictate to investors or coerce them into lending it their money at below market rates is only fooling itself, not the investor. The local bodies in New Zealand are willing to undertake extensive works programmes and should be permitted to borrow at market rates.

Many local bodies have very important works which are at present held up; and I am sure that if the money was available employment would be found for many men. To mention one work—drainage reticulation in suburban Christchurch and adjoining counties: This work is important and must ultimately be gone on with. After all, the health of the community is more important than the matter of i per cent, or 4 per cent, interest. Lenders are willing to accept 4 per cent, and 4J per cent; so why should progress be hindered? No wonder certain nationalities are hated for their love of gold! In a young country health should come first and governments should realise this fact.- - YOUrS ’ etC " JAMES WRIGHT. September 10. 1938.