THE COMPULSORY WAR LOAN

Dominion, Volume 10, Issue 3160, 11 August 1917, Page 8

THE COMPULSORY WAR LOAN

ii '.7 elfc fluite complimented when Uio finance Minister said on Wednesday: In the event of the voluntary contributions falling s]i or t 0 f fho aiuoiiiit required, I will ask the House lor authority to introduce a system of compulsory contribution."' In the London "Times" of November 13, 1000, appeared a letter contributed by me on "Australasia's Never-Never Policy, from which the follow-in* e*cerpt is taken: "Speaking for Kew"Zealand, resort to the Loudon market is quite unnecessary. Half a million sterling could easily be raised from the well-to-do classes. Call it a tax. The lax could take tho form of an enforced loan, bonds bearing 3 per cent, interest, with sinking fund for 25 or 30 years added, being issued therefor. Tho taxpayer, otherwise bondholder, would not be inconvenienced as the bonds would be at once negotiable nt par. Roughly, during thirty years .£15,000,000 has been spent in railway construction—X'soo.ooo a year. The future rate would be just the same." It will bo seen from Uiis that I forestalled Kir Joseph Ward by seventeen years. On the 10th a leader in "The Times," facetiously written, u/plield my contention. "The Thunderer" regarded me as "Apostolic." I never foil like that, but now realise I am decidedly "Patriarchal." I invited the Agents-General to answer my letter. This they did, not forcibly, but in forcible language. I was so decorated with lingual gems that the opinion they professed to hold regarding mo wero unmistakably plain. Mr. W. Pomber Reeves, for New Zealand, wrote indignantly thus: — "Taking New Zealand finance as a shocking example, lie goes on to indicate how his heaven-born financial reformer ought to set to work. First, borrowing from London might be put a stop to, and the money for colonial public works raised internally by an enforced loan from the wealthier classes. There is something refreshingly medieval about this: it smacks of the benevolence of the Plantagenels or the methods of Charles II." Referring to "The Times" leader of the previous day, Mr. Reeves proceeds: "Any iguoramus can be racy, any fanatic can bo fervid, but the combination is not, all that is wanted when tho writer is drawing up a damning indictment against the ' honesty, credit, and standing of industrious patriotic British communities." From Mr. Reeves's standpoint Sir Joseph "Ward and I must be finally ridiculous, but the question resolves itself into one of statui?. Is the honourable baronet to be classed amongst the ignornmusts, or am I to be promoted to tho level of that eminent financier? I feel quite "toney" already. Mr. Reeves concludes: "I am challenged to say how much of the national debt is reproductive. I unhesitatingly say that nine-tenths of it is so, directly or indirectly. This is the security the English 'lenders have—a prosperous, intelligent, expanding young nation, the wealth, honesty, and energy of which form, in truth, the safest possible of sinking funds." Mr. Copeland. for New South Wales, wrote I was scurrilous, and took the same line of argument as 'Mr. Reeves. They simply adopted in this matter the lawyer's motto: "No case, abuse tho opposite attorney." My proposal lo borrow half a million a year in New Zealand was argument enough as to my • faith in the soundness of this Dominion. But my opponents ignominiously abandoned the brief when they alleged tteir respective countries' wealth was a sinking fund. Certainly it" was good enough security for tho money lent, but it could not, by any process of reasoning, bo construed into a sinking fund. They ignored tho 'most important point, the purport of my letter, redemption if the loans, therefore they left me victor in the field. Anyone reading British War Budgets will have observed a sinking fund is provided 'to redeem the hundreds of millions borrowed. Will New Zealand follow that example of sound finance? Of course, Sir Joseph Ward may deem it advisable to leavo matters in a state of fusion until after the war, but •at the settling this Dominion should place its finances on an honest footing. Such a disturbing element as this war is unlikely for decades to come. Look what bother there was in floating loans to redeem those falling due. I do not remember exactly at what rate, but probably ns much as, if not more than, tho original loan. And all this because a needy Colonial Treasurer seized the sinking fund that should have gone to extinguish the debt already incurred, and his example was followed ever after-: wards as an excellent principle. I have a hazy impression—it may have been only a dream—that Sir Joseph Ward stated a sinking fund would drain the heart's.blood of tho community. A few years ngo Sir Joseph Ward initiated a plan . for paying off tho Dominion's debt in 75 years. The British public bodies have to provide a sinking fund for, I fancy, thirty years, so that this scheme of Sir Joseph Ward's will occupy 2\ times the British period, not including that in which it should have been liquidated, for tho bulk of the VogeLAtkinson loans should have been paid off by now. I am on firmer ground than the Armageddon cranks, prophesying that Be ?5 years' redemption scheme will never run its course. Some hard-up Treasurer, when sufficient has accumulated to make the accretion worth takits, wSI lay violent hands upon it. But the guarantee 7 "When have guarantees withstood pressure? An Alexander's sword has always been found to cut the GoriTion knot. But the scheme has done what it was intended for—enhanced Sir Joseph Ward's reputation as a brilliant financier. Why should not an Imperial guarantee be obtained when our war loans are being permanently adjusted? Britain is lending tens, perhaps hundreds of muTTons to States so rotten that there nro probabilities' the loans will never "be repaid. AX we would require from her is, to indorse our bills—givo us the honcIrt of "ncr credit. Surely we aro a better, security than many of those dubious European States?—vide Messrs. Reeves and Copeland's panegyrics. The British guarantee should be an enormous help to flotation in London, and possibly a great assistance in fixing tho rates, as generally British are more favojned than Australian loans. Surely Britain s'liouu! 'do something for us? "We are fighting her war, in the senso that wo had no voice..in the iriakihg of it. Of course we are only doing our duty; but this adjustment would, afford Britain an excellent opnortunily oF expressing her gratitude by bestowing on us a material favour which would cost her nothing. 'And more important still: if woulil constitute"a strong link 3or"biM\ing Britain and her offspring yetmore closely together, for surely her children would appreciate and never forget her generosity in offering them this welcome assistance.—l am, etc., WM. STEVENSON AICKEN. Auckland, August 8, 1917.