HIGH WAR-DEBT INTEREST

Sun (Auckland), Volume III, Issue 831, 27 November 1929, Page 9

HIGH WAR-DEBT INTEREST

MINISTER’S STATEMENT CAUSES CONCERN

MARKET NOT ALARMED United P.A.—By Telegraph—Copyright I Reed. 10 a.m. LONDON, Tuesday. The Stock Exchange is not alarmed at the statement made in the House of Commons by Mr. Tom Shaw, Secretary of State for War, and considers that the Government would only attempt to reduce the interest rate on war stocks by legitimate means, such as voluntary conversions. The prices of practically all Government stocks opened lower, being marked down as a precautionary measure to prevent sales by nervous holders. The 5 per cent. War Loan, to which it was obvious that Mr. Shaw referred, fell 3s 9d to £99 15s. The statement referred to was made by Mr. Shaw during his speech on the Unemployment Insurance Bill. The Minister said: “We are now paying £100,000,000 a year too much to people who have not the smallest moral right to it. During the war money was lent to the Government at inflated rates. After the war we adopted the policy of deflation and are now paying interest in deflated money. That fact must be faced before this country can get on its feet again.” This utterance aroused much comment on the speech in the lobbies and many speculations as to whether Mr. Shaw spoke with the assent of the Chancellor of the Exchequer, Mr. Philip Snowden, also as to whether his speech signified that legislation is to be introduced at the expense of the holders of war stock.