SUMMING UP.

Dominion, Volume 2, Issue 483, 16 April 1909, Page 6

SUMMING UP.

■-» ■ PREMIER AND CONFERENCE. MONEY, MAILS, TRADE AND DEFENCE. ' , t . - SOME IMPORTANT STATEMENTS. ! A deputation of delegates of tho Now Zealand Chambers of Commerce waited upon the Prime Minister (Sir Jojoph "Ward) yesterday, and submitted to him'tho principal resolutions agreed\to at the conference of Chambers of Commerce which has just been held in Wellington. '• The chairmab of tho conference' (Mr. W. 6. Duthie) said the conference represented , practically every chamber of commerce throughout ;tho Dominion. The conference had been considering a number of subjects . ef very great importance to tlie whole country, as woll "as to commerce. The resolutions arrived at would bo forwarded to the I'rime Minister as soon as they were typewritten. In the meantime, he would, on behalf of the conference,, mention n few of the moro important questions that had leceived their attontion. The Bankruptcy Law. - Krst, there was tho bankruptcy law. The conference was very strongly of opinion that the bankruptcy law required amendment, and they had given special attention to that subject. Tho question had-been before the various chambers of commerce for a ctneidorablo time. The conference passed a resolution to the effect that tho administration of the present bankruptcy system has been and is extremely unsatisfactory, and in many respects defective. The resolution then went on to set forth the reasons why the conference thought it was'so, and suggestions were mid© as to how the troubles could be got over. . r Mortgage Tax, The conference passed the following resolution in reference to tho mortgage tax and the graduated tax:— "That whereas the mortgage tax has been found to be the cause of a large amount of capital being withdrawn from New Zealand j and to restrict the influx of capital for in- ■ vestment, and to create ffnahcial stringency in obtaining loans required for the legitimate development of the country's natural reeourcos, the attention' of the Government be called to the position, and it is suggested that the, mortgago tax bo abolished. Further, that in hen thereof all income derived from the investment of capital be made sub- ' ject to the income tax. "That the incidence of .the graduated tax on land generally, and especially as affecting the interests of private individuals in companies, be carefully reconsidered, with a view to such tax! being , wholly or partially abolished." ' Sir J. G. Ward: What do you suggest Should be substituted for the mortgage tax? Hr._ W. G. Duthie: The resolution says, "All income derived from the investment of capital be made'subject to the income tax." Sir J. G. Ward: That is, you want to pay j i more under the new system than is paid under the present system. , Mr. W. G. Duthie:" We want to have'the mortgage tax taken off. Sir J. G. 'Ward: You would have to pay more taxation under the altered system than >3 paid, af present. It is 'only rif,!it*"you ' should know that. . "/ Mr. W. G. Duthie :\lfc is contended that the mortgago tax is keeping capital 'from coming into the country. Harbour Boards. The next question, continued Mr. 'Duthie, was in reference ■ to , thu , representation of chambers of commerce on harbour boards. That was a matter in regard to which the conference- held rather strong views. ' In the Harbours Bill of last session v it was proposed that all members ' of harbour boards should be elected, and that commercial interests as they were represented at tho present time by chambors * of commerce representatives should be abolished. The conference thought that the' mercantile community should be directly represented on these boards,'and they passed a resolution to that effect. ' Vancouver Mall Service. -The conference passed',a resolution urging , the Government to take steps to establish a Vancouver mail service, Now Zealand being s the' first and last port of call. During the discussion the 'Fnsco sorvice came up for • consideration, and that 'Service was very nearly unanimously discarded in favour of a Bcrvice via Vancouver, wpeoially in view of the lattor sorvice being "all red." Defence: Compulsory Military Training. ■ The conference passed the following resolution on the important subject of defence: — "That this conference urges tho Government to give special attention to tho home defence of the Dominion,' and considers that the institution of a system of compulsory military training is the fairest and most efficient and economical means of defence." ' The resolution was carried unanimously. , ' ' . Bank Holidays. ' The conference Had drawn attention to the inconvenience to business people of somo of the bank holidays. Large sums of money had to be kept locked up in business and other premises through these holidays. For instance, he was informed that the Wellington Tramways Department had to deposit over £2000 after the Easter holidaja—a sura which had been'accumulating for some days. There.was risk of fire. Tho banks ought to be opon when business places were. ■ Resolutions had also beeri passed in reference to the investment of local bodies' sinking funds; and in favour of a reduction of cable cates. THE PRIME MINISTER'S REPLY. Sir J. G. Ward, in reply,, wolcomed the delegates of the conference of chambers of commerce who had come to place before the Government the resolutions on /the important matters the conference had been dealing with. Hβ could assure them that tho representations of tho conference would be closely examined, and would reccivo tho fullest con-, sideralion of the Government. As he had stated tho other day, he was quite persuaded that the outcomo of the deliberations of tho conference upon the important subjects with'which thoy had been dealing must be for ,the good of the commercial community; and, on broad grounds, what nas valuable to tho commercial community miift be valuable to the country generally." For that reason,' tho representations of tho conference would bo very fully considered. Bankruptcy Law. Ho thought with tho deputation ,that amendments in tho bankruptcy law were essential. The exact direction in which thoso amendments would go it was to indicate at present. The whole matter was being investigated by the Government with the view to submitting proposals to Parlianext session. He would ndt commit himself definitely on that point. That would depend a good deal upon cir oumsta'ncee, and upon the work the Government had to got through or that required I ' attention. The points submitted to the Go- | vernment on this subject would be very care-' - fully examined. It was contemplated making , some in connection with the Bankruptcy Department; but he did not fool at liberty to mention those changes at the present,-moment. Mortgage Tax: Income Tax. Ho wanted to say a hw words in reference to the mortgage tax; The Government could not'bo carried off ifa feet by representations made in connection with taxation matters. They must fully* consider tho effect tho proposed alterations would havo. If tho Government were to givo effect to what theconference proposed, he did not know what they wore going to have as a substitute. Tho result of such a change Would bo this: That instead of tho mortgage tas of 6s. 3d. per cent. ', tho taxation would be from 7e. to Bs. per cent. That would bo tho effect of tho suggested change from tho mortgago tax to the income tax. Ho was certain that was not what tho deputation wanted; but that was what thoys,wero asking for. A certain amount of rovonuo had to bo provided every rear, and that revenue must comeJrom some

reliable source, and that form should bo the fairest and most equitable that could bo devised. Land Settlement. And they must always remember that tho country, had affirmed and re-affirmed in connection with taxation that one of tho primary conditions was—and it was believed-to be in the general interests of tho country—a close system of land settlement. To tho Government—whoever the Government might bethat was ono of tho concomitants almost of tho position without desiring to injure in dividual?, tho policy of the country in that respect had been affirmed and ro-affirmod timo and again. Ho was bound to keop boforo him tho important matter of the closer sottloment of tho land and tho goneral development and progress of the country as a whole. Removing a Wrong Impression. So, in going into that question, ho wanted to try and removo a wrong impression that had been created with reference to tho mortgage tax driving money out of the country. If that was so—and thoy could only judge of tho position by tho actual facts as thoy at present existed—if that was so/ho wanted the mombors of tho chambers of commerce to toll him how it was that one of tho great investing companies that came to New Zealand came horo when tho mortgago tax was 33 1-3 per cent, higher than it was now; and they carried on thoir business for years without _ a murmur or , a complaint about it. As a matter of fact, thoy would find in connection with the Northern, North British, New , Zealand ■ Trust and Loan, Now Zealand and River Plato Mortgago Company, and the Otago and Southland Investment Company—they went out of this country; and it was just as well to realiso why they went out. . Advances to Settlors. They went out after tho advances to settlors system camo' : into operation, about the year 1896. Hβ assumed that the Department was lending at such a low rate that ordinary investing companies found that they could hot make a sufficient profit to justify them remaining in- this, country.'. The mortgage tax had nothing whatever to do with their leaving this country. They would find it on I record that when monoy was at tho lowest rate it had over been in New Zealand—4 and I 4J per cent.—there were largo outsido I lenders, and there was then a mortgage tax , in operation. If tho Government mado the \ change tho deputation asked; for, it would | mean this: that, instead of paying 6s. 3d. per cent., thoy would have to pay from 7s. to Bs. per cent. Mortgage Tax Elsewhere. In Victoria, Western Australia, and Now South Walee, they imposed an additional 100 por cent, higher rate upon investments in mortgagos than they did upon incomes doriyedfrom' personal exertion.' 'In the United Kingdom, .within the last two years, a committee of the House of Commons, after taking evidence on th«. question, recommended that a differential rate should be imposed, and that money invested on mortgage should pay higher rates than money obtained as income from personal exertion. He mentioned that for the purpose of drawing attention to tho theory that had been propounded, that the mortgago tax was driving away capital from Now Zealand, which, with the information in his possession, ho did not believo was the case. Tho fact remained that in other countries mortgages were treated differently to income from other sources. | ' 'From.Frying-pan..to Fire. In regard ,'to the transfer of tie mortgage | tax to an income tax, a higher rate would have to be charged on mortgages than upon i ordinary income. So that, instead of going out of the frying-pan to a cooler climate, it' would be going out of the frying-pan into tho fire. Hβ wished to' tell them the position in regard to tho representations they had made to him upon this matter: He would, however, be quite ready to give their representations and arguments tho most careful consideration. If thoy' abolished tho mortgage tax something would have to be put in its place. It was just as woll to tako a practical viow of the matter, and realise the true position. Mr. D. J. Nathan: Wo knew that. Sir J. G. Ward: I am very glad to know that. I knew it too. Mr. M. J. Marriner (Christchuroh): What is the amount you got from the mortgage tax? * Sir J'. G. Ward: I cannot tell you off hand, but I think it is about £70,000 a year. Mr.-H. O. Tewsley (Wellington): Would it be too much to ask you why it should be 7s. or Bs. per cent., as against 6s. 3d. per cent.? Sir J. G. Ward eaid he had had the figures carefully worked out. and the, result was as he had stated. Whoever the Treasurer was, either now or in the future, he would have to provide for tho same results being obtained as thoy wero getting now, Mr.' D. J. Nathan: Quite right too. Mr. H. C. Towsley: Yes, but in a different way. Sir J. G. Ward said ho had read the works of the greatest authorities on taxation, and there was a great divergence of opinion upon this complex subject. The Government iv'Duld be prepared to consider the matter from a practical standpoint. Tho Graduated Tax. With respect to the . graduated tax, that was a very important proposition. He just wanted-to say this: that there were great difficulties in providing a system of taxation to meet the requirements of this country. The graduated tax was imposed in order to prevent tho growth or. aggregation of' large landed areas and estates in ,this country. If what the deputation proposed went in a direction that was contrary to that policy ho could not entertain it. In respect to the application of the system to ordinary business cither in town or country, if there was an injustice being dono under tho present system, it ought to bo capable of being removed without opening the door, or woakening tho law-that was intended for a. partioular purposo as far as land settlement was concerned. Keeping that end before him, ho would be quite willing to look into the matter, land see if he could not effect an improvement in some direction, and ho presumed that was what they desired. (Hear, near.) It had to bo remembered that thore I woro somo extreme cases in Now Zealand in the towns where people hold considerable areas of land with very small hnprovomonts upon them. They were well onougb off to hold that land, and allow their neighbours to go on making improvements, thus making their properties, thus held, much more valuable. That was a class of holding that he had to k«op before him in considoring that question. Ho tiought something might be dono to meet that position. That was ono of the questions ho was willing to try his best to solve satisfactorily. (Hear, hear.) Harbour Boards. With respect to representation on harbour boards, ho knew thcro woro peoplo who advocated the election of all members of harbour boards. While it was right that some of the mombors i should be elected, still in the general interests of the community Uβ thought tjhero should bo som'o nominated members (hoar, hear), becauso these boards had enormous responsibilities. Thero was scarcely a harbour board that had not obtained very largo sums of money from outsido this country, and those who lent tho monoy did so undor tho boards as they wero constituted at the time tho money was advanced. Therefore, if drastic changes woro mado in>the constitution of the boards tlio londera of tho money might say that tho change had weakened their securities. In respect to this matter, ho thought thoy might take it that tho Government would be reasonable • in tho proposals they submitted to Parliament. Mall Services, In regard to mail services, what tho deputation wanted to get was. a good mail and passenger servico combined to the Old Country, and by the quickest possible way. A Voice: All-Red. Sir J. G. Ward said that personally ho had been trying to get an Afl-Red sorvico for a long time. It had been stated in Auckland that it was possible tho 'Frisco sorvico could bo renowed if Now Zealand mado a movo' in the matter. From information conveyed to him, ho gathered that tho former runners of that lino carried on a good service, but lost an enormous sum .of jnonex. Ho was informed- from.a "Wt

) reliable source that there was no chance : > of those steamers running again unless the ... owners wero paid a very much larger subsidy. The United States Government had . so far lefused to subsidise the line and from ■: ' statements made to him it would not be '■''■ \ possible to get these Bteamers to run the sorvice again at anything approaching the : subsidy formerly paid. If wo wanted to get '~. it, we would havo to pay a subsidy of from ■;■ ■ £60,000 to £70,000 a year, and then there I would havo to be a considerable amount paid at tho other end to warrant the service run- ■, ning. ' .Mr. G. Shirteliffo (Wellington): Wo do ] not suggest that a subsidy should bo paid t I to an American company. Sir J. G. Ward said ho was explaining tho ' position for the benefit of those who might l • not know the circumstances. The Govern- ) ment had repeatedly offered a subsidy for i a Vancouver service touching at Now Zoa- 1 land ; The position of tho present Vancouver i servico calling at Brisbane was well known. 1 ' Mr. D. M'Phorson (Dunedin): I under- < stand that tho present arrangement will l soon terminate. . .'..',. ... i 1 Sir J. G. Ward said ho understood tho * contract would soon terminate. There was ( no doubt, if the' British Government, and < 1 tho Canadian, New Zealand,and Australian i 1 Governments were to act together,, they i could get one of tho finest /'All-Red" ser- i vices to England—superior to anything they s had over had. , ( A Voice: A monthly service. c Sir J. G. Ward said it would probably be < a fortnightly servico. It would bo a very 1 finO:thing to bring about, but it.could only 3 bo done by the combination of the four ( Governments. Ho was with the deputation f in wanting an improved mail service—he was 1 anxious to see that brought about. i Compulsory Military Training. ] The defence question was an important * one. Proposals would be submitted to Par- ' liament next session which would effect a c complete change in cur defence system. The .' change would bo pretty far-reaching. . He ~ would be very glad to consider tho proposals ' of the conference with regard to compulsory t military training. It was hardly necessary ' to 'flay that if Qiey attempted to create by s process of law a compulsory system in this } country thoy would require to make a great ..} many exemptions. Hβ thought the pro- i posals that would .bo mado to -Parliament ' ought to meet tho general requirements of j tho country, and should receive tho endorse- ' mont of the people generally who wero work- I ing for a 'system which was covered under ' the general system the deputation had c brought before him. Ho was anxious to 1 bring about a change for tho better .and f ho _ was certain there would bo a great change for tho, better. After speaking in « ;oomplimehtary, terms of tho Volunteers, ■ Sir ' Joseph said that those who gave up so ' much of their timo to defence ought at « least to bo supported by men who from timo to timo would bo available for volunteering 3 purposes, and he hoped to bo able to pro- < pose a system that would enable that to be t donej. . ■'■. -.'...■■■. ..■ ■■ •■ ■ 1 Bank Holidays. ' * The* Prime Minister promised to go into I the whole question of bank holidays, and he. t hoped to be ablo to submit proposals that t would meet the existing conditions. 1 ' Sinking Funds Investments! 1 Ho was prepared to have the question of I tho investment of, local bodies' sinking funds £ investigated by, the Public Accounts Com- t mittee. If it was ehown that an alteration 1 ' of the law was desirable, he would bo pro- 4 pared to consider that. v t Lowor Cablo Rates. , i Dealing with tho question of cablo Tates, J Sir Joseph remarked that he was sorry to c say that some of those who wero parties to ' the Pacific cable agreement woro giving, or ' had given, from 70 to 90 per cent, of their business to peoplo who wore opposing the Pacific cable. NW Zealand gave 90 por cent. * of its business to the Pacific cable. Ho did c not wish to injure tho other service. There ■' was room enough for both. He thought both J ought to be carrying on their business at a lower rate. Ho hoped the important press J conference which was to bo held in London c shortly would take up this question. * Conclusion. . 1 In conclusion, the Prime Minister *aid it ' would bo an advantage from time to time ! for. the Government to be able to consult f with a representative body representing th« r chambers of commerce in respect to certain , important questions as to which their advice + and suggestions would bo valuable. , Th° chairman of the conference, on be- j half of tho chambers of commerce of New , Zealand, thanked the Premier for the courtoous manner'in which he had recoived tho deputation, and for the sympathetic manner \ in which ho had considered and dealt with v thoir requests. '