PEASANT DEBTS

Hokitika Guardian, 18 January 1933, Page 7

PEASANT DEBTS

ADJUSTING INTEREST RATES

.MEDIATION FORC ED BY LAW

The problem of adjusting interest rates to the- new economic level is iiore acute in some countries than in (.tliors. The Belgrade corrrtsnon- (! -ii] of the Economist recently reported that official investigations of peasant debts in Jugoslavia have revealed that these amount to a sum equivalent to about 40 per cent of the national income from agriculture. The crux of the problem lies, however, in the! heavy interest rate, which frequently exceeds ‘2-1 per cent. A special law lias now forced this rate down to 10 per cent for all registered debts. Tile law has now forced this rate down to 10 per cent for all registered debts. The law is subjected to severe (criticism from certain quarters on the ground that it will make all future peasant credits impossible. This criticism may be easily met by the fact that reduced credit is now withholding peasants from rushing headlong into unsound economic experiment, and that there are -signs of cheaper money in the future. Now that banks have reduced the rate on deposits to 5,4, and even 3 per cent, and that the feverish building activity has reduced (lie yield from houses from 12-18 per cent to 9-14 per cent, with the likelihood of another severe drop in the spring, much of the money which is now lying idle will have to be satisfied with a- considerably lower rate.