OVERSEAS INVESTORS

Waikato Times, Volume 119, Issue 19899, 30 May 1936, Page 11

OVERSEAS INVESTORS

COUNTRY’S CREDIT. LABOUR POLICY RIAO‘I’ION. THE MINISTERS REPLY. WELLINGTON, Friday. The alien on overseas investors of the Government's financial policy‘ was discussed by Mr W'. J. Broadi’oot‘ (Opposition—W'aitcmo) during the} second reading debate on the Statew Advances Corporation Bill in the House] of Representatives to—day. Mr Broadroot pointed out that the State was to guarantee the bonds issued by the -Corporation. “in about three years there will be a loan of 217,000,000 or £18.000,000 falling duo in London," he added. “The only way will he to renew the loan. 50 (ar the Government has not suggested anything to the contrary and if there Is lack to confidence in the financial stability of this country on the part at the overseas investor the rate of interest will come into the picture and we shall have to pay more for our accommodation. Loans compared. ( “ We have had a slight taste or that quite recently. A conversion loan was negotiated in London last year by the last Government. Although it was at 93 with interest at 3} per cent it was vary substantially over—subscribed and immediately afterward went to a slight premium, which was proof or confldence in the stability-of the country at that time. The present Government undertook a conversion a few weeks ago and the loan was substantially under-subscribed. Actually about 35 per cent was left on the hands of the underwriters and shortly afterward the issue went to a discount." In the case at the corporation’s bonds. Mr Brosdfoct continued, it was necessary to be satisfied about the guarantee to be given. The Government in the past had talked about sOcial credit and debt-free credit and it was surprising that no steps had been taken in the present Bill to shotish the payment of interestaltogether. However, it was found that the Government had gone back to the old way of raising money by bonds before lendlng it out to the community. “wrong and Harmful." “ it has been stated that the loan which this Government floated is now being quoted at a discount and that this indicates that our financial standing is not good in London," said the Minister of Finance, the lion. W. Nash, in replying to the point raised by Mr Broadfoot. “ I wonder whether people who talk like that really are anxious about the. goodwill of the London market. I do not. think they are. It seems to me that people of that type are willing to use that- argument to discredit the Government and that they put the political advantage which they might get momentarily in front of the goodwul or the country at large. “To show the element of confidence ‘which there is in London in the credit 01' this country it is only necessary to note that the underwriters in London gave us exactly the same terms that they gave the loan issued by the last Government. The arguments which have been used about this are wrong in their entirety and are harmful in their effects. " 'l'hcy are wrong because there is evidence that the astute people in London gave us the rate they did. The test is that those underwriters had confidence. and it there is any far-see-ing section of the financial community in London it is those very underwriters." * NOT MANDATORY. LIFE INSURANCE POLICY. WELLINGTON, Friday. In replying'in the second reading debate on the State Advances Corporation Bill in the House to—day, the Minister of Finance, the lion. W. Nash, stated that the clause providing for a mortgagor to eii'ect a policy of life insurance as an additional security is not mandatory and does not aim at taking anything away from the mortgagcr. ” Thixprovision in the Bill is meant as a sec rity for a widow who might need protection in the event or the death of a husband." the Minister said. “ There is no intention at all to take anything away from ithe mortgagor. The clause is' not mandatory, but will provide a widow with the necessaryt freedom from the encumbrance of at mortgage should her husband die." Ml" Nash stated that there had been or suggestion of the alienation of the proceeds of the policy. There was no intention in the clause to create hardship in the slighest degree. l -——.—._=