RATES OF INTEREST

Evening Post, Volume CXXIII, Issue 137, 11 June 1937, Page 10

RATES OF INTEREST

REFERENCE EXPLAINED

(By Telegraph—Press Association.)

DUNEDIN. June ;10.

Questioned tonight on the remarks made by the chairman of the board of directors of the State Advances Corporation, Mr. A. D. Park, in reference to Mr. G. R. Ritchie's speech at the annual meeting of the Trustees. Executors and Agency Company (Dunedin), Mr. Ritchie stated that in referring to interest rates he had said that there was an indication of higher rates in Australia and that in the Dominion he ventured to think not much money was offering for the State Advances Corporation at 31 per cent. There was no intention to create the impression that the corporation's general lending rate of interest, at present 4 1-3 per cent., was facing a prospective rise.

MR. PARK'S REPLY

The chairman of the State Advances Corporation Board (Mr. A. D. Park) today remarked that he had nothing to add to his previous statement regarding Mr. Ritchie's viewpoint on the. response to the Corporation's present issue of securities, other than to say that a further reply to, Mr. Ritchie would in due course appear in the published accounts of the Corporation. Regarding the rise in interest rates in Australia referred to by Mr. Ritchie Mr. Park said that the formers remarks did not wholly cover the changes that had occurred in the Australian position. In the first place the conditions in the two countries. were entirely different. Late in 1935 and for nart of 1936 Mr. Park stated that the Austrian London funds and local cash resources were the cause of a good deal of concern to the authorities there, and the tendency for rates to harden was acknowledged. The poflUon in New Zealand was in no way parallel. However in the later part of 1936 and during <he course of the present year the position in Australia had entirely altered with the result that the Commonwealth Bank announced there was no longer any necessity for an upward trend in interest and that dearer money was not rendered necessary by econominustrda«ng Sthis. Mr. Park added that, while the average return on all issues of Australian consolidated loans was £3 19s Id on March 18 last, it was £3 18s 2d on April 15 and £3 17s 8d on j May 13 which was an indication that in the gilt-edged market the interest rate was falling.