PRICE OF MONEY.

Manawatu Herald, Volume XLII, Issue 2151, 17 July 1920, Page 3

PRICE OF MONEY.

INVESTMENT OUTSIDE DOMINION. Questions of general finance were discussed in the House of Representatives on Thursday. The effect of the Government qnswers J;o two questions under this heading was: The Government does not consider it necessary to propose any amendment to the Mortgages Extension Act, 1920.

Should circumstances arise, the necessary action will he taken to restrict the remittance of money beyond Now Zealand for investment. Mr W. 11,-Field (Otaki) considered that something would have to he done to,renew the moratorium, or there would he danger of a crisis wTien it expired on 31st December. The present power to obtain an extension of a mortgage in case of

hardship by application to the Supremo Court was not sufficient. The price of money was increasing, and he gave an instance of L51),009 having been sent to Australia for investment at 8 per cent. It had been earning 5 per contain New Zealand. Small farmers, whose mortgages felt due, might have to pay the higher rale for renewal, and it would ho very hard on them. The Prime Minister later referred lo opinions that had been expres-ed that (he.priee of money was likely to go still higher. They had dealt with tin! moratorium by legislation, and he was inclined to think they had done so satisfactorily. La-1 year the term was extended to the end of 1920, and there was provision that a further extension tor a year should ho granted by the Supreme Coint in eases where it was shown that termination would he a hardship on the mortgagor. That was as much as was thought necessary at present. If more legislation wdre required'it could he provided next session. It had been stated that the Government had no power to keep down the rate of interest except on loans from Government Department- —Public Trust, Advances to Sel tiers, and Government Insurance. That was not quite correct, for local bodies borrowing money had to obtain permission, and that was not given if the rate of interest was too high. Some time ago the rate wits fixed at 5j per cent., hut he was hound to say that at the present time it. was difficult to find money at; that rale, and local bodies seeking renewal of loans had to pay 5j per cent. While it was necessary that they should keep money in the country, there was a difficulty in regard to this, as money did not always go out in the form of coin. Much ivent .out ill the form of produce, for which payment might lie made in London.' At the same time the rate of income tax was hover here than in almost any other part of the Empire. Taxation was higher in Australia, Avliere there Avere belli Federal and State taxes. This operated to keep money in the country, and he avus satisfied also that the men who had money for investment Avonld be patriotic in putting it to the use and advancement of their own country.