The New Zealand Railways Magazine, Volume 7, Issue 2 (June 1, 1932)
Interest: Prices
Interest: Prices.
There are more things than tariffs to compromise about. There are loan burdens. The pricefall has greatly increased the amount of goods that a primary produce exporting country must send to Britain in order to pay 5 per cent. on £100 borrowed. Australian calculators say that if the British lender reduced his rate of interest to 4 per cent. he would still be receiving in commodity value a little more than when he lent the money. They suggest that if the British Government could prepare the British market for a big Treasury conversion the British Government might do likewise for Australian borrowers, particularly as the Commonwealth Government prevented one of the States from defaulting. New Zealand cannot be deaf to these remarks. Sterling developments also open new possibilities in currency.