FINANCE PROBLEMS.

Taranaki Daily News, 15 July 1920, Page 4

FINANCE PROBLEMS.

THE MORATORIUM EXTENSION. LOAN'S TO LOCAL BODIES. INTEREST NOT SUFFICIENT. (By Telegraph—Special Correspondent.) Wellington, Last Night. A suggestion that the moratorium ought to be extended again was mentioned in the House by the Prime Minister this afternoon.

Mr. Massey said Parliament had dealt with the moratorium last year, and he thought the arrangement made then was satisfactory. The moratorium had been extended until the end of this year, and provision had been made that any person who was unable then to face the repayment of principal, or who was threatened with hardship, could apply for relief to a Judge of the Supreme Court. The cas|j, presumably, would be dealt With Tn Chambers, and the Court would ha/o power to extend the period to a date not later than the end of 1921. , Mr. Massey added that something mora might be done next session if that proved to be necessary, A statement had been made, continued the Prime Minister, that the Government had no power to ke?p down the rates of interest except in the cases of loans made by the Govenitaent lending departments. That was not quite correct, since the Government had legal power at present to fix the maximum rates of interest to be laid by local bodies. This rate had been fixed some time ago at 5 per cent. He was bound to say that local bodies were having considerable difficulty in raising money at that rate. Members: Thoy cannot get it. Mr. Massey: They are having difficulty, especially in the case of renewals where large sums of money are falling due. It seems to be impossible for local bodies to borrow below 5 J per cent., and sometimes it is difficult even then. The duty of the Government i? to keep down the ra.te of interest. It would be a very bad thing for this country if the rate of interest went too high. Mr. Massey added that the Government had tried to prevent money being sent abroad for investment, but it was very difficult to prevent this. Money did not leave New Zealand in the form of coin or paper currency; it left in the fprm of produce, and very often the payments for this produce were arranged to be made in London, New York, or elsewhere, but in practice a restriction on investments abroad was imposed by the fact that the income tax wa3 higher in nearly every other country than in New Zealand. He did. not think that peopie would gain much by, sending money away from New Zealand for investment, mi he hoped, in any case, that people would be patriotic enough to invest their money in their own country.