MONEY & INDUSTRY

Wairarapa Times-Age, 17 May 1938, Page 8

MONEY & INDUSTRY

FINANCE MINISTER DEFENDS GUARANTEED PRICES CONTROL OF INTEREST RATES POINTS OF PARTY CONTENTION (By Telegraph—Press Association.) WELLINGTON, This Day. The belief that the Government’s guaranteed price policy had done more to remove from the mind of the farmer the fear of low prices and consequent inability to meet his accounts than any other single procedure since the commencement of the dairy industry was expressed by the Minister of Finance and Marketing, the Hon W. Nash, in his public address at the King George Theatre, Lower Hutt, last night. Mr Nash reviewed the Government’s record over the past 29 months, defended its control of currency and credit, and Claimed success for its primary produce marketing scheme. Mr Nash said the overseas debt today was £2,707,000 lower than when the Labour Government took office. Interest on the overseas debt had been reduced by £450,000. Exchange on overseas loans had been reduced by £ 105,000. “The last point in connection with credit and interest rates,” the Minister observed, “is the endeavour by supporters of the National Party to force up interest rates to local bodies. For more than 12 months the insurance companies and other lending institutions refused to loan money at 3J per cent. The Government refused to allow the rate of interest to be raised, and stated that if the ordinary lending channels would not advance the money the Government would, and in fulfilment of its policy loans granted to local authorities at 3J per cent per annum since April 1, 1937, amounted to £1,011,000. “The Government’s consent to .the raising of interest rates to local bodies would inevitably have driven all interest rates higher,” the Minister said. “The toll of interest is still very heavy, and the Government will do what it can to prevent the increase of the load, and the reduction of the burden. We see no reason why good sound local bodies should be compelled to add to the burden of the rates by increased interest charges.” Mr Nash compared the reduction of overseas debt by £2,707,000 in less than three years with the record of past Governments. “In the 10 years, 192030, New Zealand paid £54,892,497 in interest overseas, and in the same period borrowed £54,263,451,” he said. “So that we borrowed the whole of the money to pay our interest. These were boom years. Compare this with the past two years. We have not borrowed a penny overseas.” Having discussed the movement of dairy produce prices over a period of years, Mr Nash said:—“The result of the first year’s working was an average pay out for butter-fat for butter of 13.68 d and for cheese 15.18 d. Now, let us come to the second year. After a very exhaustive inquiry and investigation, it was decided to buy all butter at 13jd a pound and cheese at slightly more than 71d a pound. This should provide a pay-out of at least 13.88 d for butter suppliers and 15.88 d for cheese suppliers. The actual result of sales up to May 18 shows a surplus on butter sales of £491,966 and on cheese sales of £38,717. This money belongs to the dairy industry account. “The Government has no desire and has never had any desire to profit at the expense of the dairy-farmer. As the Prime Minister said when the price was announced, ‘it was not the last word.’

A motion expressing complete confidence in Mr Nash as the member for Hutt and Minister of Finance, thanks for his address, and pledging support to Mr Savage and the party, moved by Mr H. Combs, Labour candidate for Wellington Suburbs, was carried without dissent.