NEW ZEALAND FINANCE.

Dominion, Volume 9, Issue 2789, 6 June 1916, Page 6

NEW ZEALAND FINANCE.

SOME SUGGESTIONS EE LOCAL LOANS. Sir, I quite approve of the reported intention of tile Uoverniuent to raise another loan in. the Dominion. Surely when Britain is in such financial straits to prosecute a war, which is as much ours as'hers, we. ought not to add to her difficulties and borrow from her, when ws have so much idle money in our bants waiting for investment. The State should, however, be prepared to pay a fair rale of interest, more than the £1 per cent, on the previous issue, the amount then raised being, subscribed, not so much by the public as transferred from tho Savings Bank and other Government Departments. I notice that £5 per cent, is given at Home. The Anglo-French gold bonds are now offered in the United States, and advertised as "yielding an' income of nearly 5i per cent, on tbo investment." Those of us with means have to pay n big increase in 'taxation; we are reproached if we do not give liberally to patriotic funds, and we arc also expected to subscribe to Stato loans, and we should do all these things generously. It is not reasonable that wo should be asked to lend money for a long term of years at much below the current rate of interest. If in Britain a higher rate of interest has to be paid later, tho present bondholders will have the advantage. Income tax is not charged in New Zealand, nor is it in Britain to

"holdors not resident in the United Kingdom." So, while at present you can only get U per cent, here, you can invest in British bonds, which is more patriotic, and get a return of 5 per cent., which is in proportion to what it used to lie.

As your readers are probably aware, bonds with coupons attached, as usual in New Zealand, are not a trust security, being "payable to bearer." In Britain, and I presumo in tho United States, with the Anglo-French gold bonds, the stock can bo registered on payment of a fee of ono shilling per bond. This 'makes it a "trust, security," and if desired 'later tlicy can be reconverted into "bonds to bearer'* without charge. Our Government, could easily arrange with the Bank of New Zealand to register here and thus enable trustees to invest.

One other advantage should be given as a matter of justice, viz., the same provision as made in the Australian war loans, that its bonds "will l>e accepted at par in payment of probate and succession duties." Our Government has increased these duties here to a great extent, and it is often very difficult for the executors of an estate to pay them within the required period, so much so that in, one Wellington estate Parliament was asked to assist in raising the amount needed. The difficulty has been increased since the war began by the moratorium, which makes it very difficult, and sometimes costly, realising on deceased estates. Thus Parliament protects its subjects from being compelled to meet their legal obligations, while at the same time it is 60 inconsistent as to compel executors, just when, death complicates everything, to pay heavy death duties quickly, while it has prevented them by the moratorium from realising to enable them to do so. Tho least it can do is to give facilities for people to anticipate and provide for meeting this difficulty by investing in tho loan, and tho bonds should be accepted ill payment of these duties. Why not give in our next loan the same advantage t&at is given in Australia? It would result in a large amount being for, and insure its success.

ji/lother way, to raise a considerable amount, would, in my opinion, be to provide for the salo or annuities on more favourable terms than at present, which oould now be safely done owing to tho rise in the rate of "interest. There must be many people who could purchase annuities with advantage to themselves and the State, which would have the use of a large amount, while the annuities .would be decreasing every year, and the total liability would soon be wiped off.—l am, etc., PATRIOT.