THE RATE OF INTEREST.

Taranaki Daily News, 11 August 1920, Page 5

THE RATE OF INTEREST.

NOT GOOD TO BE HIGH. (By Wire —Parliamentary Reporter.) Wellington, Last Night. "My opinion is that legislation is not required," said the Prime Minister in the House of Representatives, when askid by Mr. Sidey (Dunedin South) if he would introduce legislation to enable local bodies and educational authorities to pay more than 5J per cent for borrowed money. Mr, Sidey had stated tliat local bodies found great difficulty in arranging their finances within the restriction imposed by the maximum rate of interest. The rate to be paid by local bodies for loans other than overdrafts was controlled by the Government, added Mr. Massey, and the Governmeift intended lo continue doing everything within its power to keep the rate of interest down in New Zealand. If it yielded to the requests that were reaching it from many quarters the rate of interest would be up to 8 per cent very quickly, and that would not be good for anyone, not even for the lenders. He did not blame the local bodies for clamoring for money for various works, but he wanted to see them get the money at a fair rate of interest. The finances of New Zealand were in a perfectly sound condition at present, and compared favorably with thofeo of any other part of the British Empire. He would deem it his duty as long as he could manage it to keep the finances in that condition.