THE VICTORY LOAN

Dominion, Volume 12, Issue 296, 10 September 1919, Page 8

THE VICTORY LOAN

STATEMENT BY FINANCE MINISTER THE COMPULSORY'PROVISIONS A statement regarding the Victory War Loan was made in the House of Representative? yesterday by the Minister for Finauco (Sir James Allen), who asked members to assist in making the flotation a success. The war had been won, he said, and peoplo could not show their satisfaction better than by supporting tho Government in its effort to secure the money stilll required.

The debentures, said the Minister, when explaining the terms of the loan, were to l>ear interest at the Tate of 4"- per cent., free of income tax. The terms were the. same as in the case of last year's loan. He felt that since about fourteen millions had been raised already under the existing authority, it would not bo fair to make a change in the case of the present ten millions. The compulsory provisions of the law would be used if necessary. It had been necessary to apply compulsion in some cases in 'connection with last year's Joan, though in most instances people had subscribed liberally. It should not be forgotten that compulsory subscribers received only 3 per cent, interest instead of 41 per cent. Some people were receiving this reduced rate.

The Minister eaid that at the time of the armistice the war expenditure of tho Dominion had been at tho rate of ■£1,500,000 per month. It was now down to i£500,000 per month, and was still decreasing. Members would understand that there were still war charges to-be met. Some of tho soldiers were still abroad, and othera i were at sea. There were men not yet discharged in New Zealand, men receiving treatment in hospital!? and men undergoing. training of various kinds. The expenses of the Repatriation Board had to be met and finally there were gratuities. The partiouiars of the gratuity scheme would, be before the House in a few days. He hoped that it would be possible to meet all the items out of the loan, though ho ■was not unite sure on that point. Sir James Allen nddecf that after the present loan of had been raised the" Government would still have authority under tho legislation, of Cast year to borrow He believed that it would not be. necessary to raise that money until Parliament had met aagin. Sir Joseph Ward, Trader of the Opposition, said ho wished to associate himself \rith the Minister for Finance in , the appeal he was making to the country. He was glad to notice that the loan was being raised on the terms that had been maintained by the New Zealand Government during tho war, that was, 4| per cant, interest free of income tax. Ho could not understand how any man Who had tho interests of the working man, the email farmer, and the small l>usiness itan at heart could wish for any other arrangement. If the rate of interest were raised, in order that the free of income tax provision might bo .removed, rates of interest would rise all\over tho country and the movement would be disastrous to very many_ people. New Zealand had enjoyed throughout the war, said Sir Joseph Ward, tho cheapest money of any country in • the world, Canada had recently borrowed money at 5' per cent, free of income tax. Tho Unitedi States had borrowed at 5 per cent, free of income tax. Great Britain had borrowed at i per cent, with a discount of 20 per cent.' The system followed. by Now Zealand .throughout the war, and maintained by tho present Minster of Finance, was calculated to keep tho price of money down. It should not bo. forgotten that the people Who wore gotting tho benefit of the free of income tax provision at tho present time were also the people who would bo required to pay three-fourths of. tho taxation of the Dominion ui the yeaTs to come.

The Leader of the Opposition suggested that tho Minister of Finance should tell' tho House as nearly as possiblo how the was to bo expended. Ho believed that it would not be possible to put tho war ftnanco on a really definite tooting for another 6ix or eig'ht months, but the timo was approaching when tho Minister of Finance would have to calculate tho expenditure and the liabilities, and put a clear statement before the House, with a view to fixing a time -when the repayment of the war debt by means of a sinking fund would begin'. Had the banks , agreed again to make advances up to 90 per cent, for tho purchase of debentures? Sir James Allen: Yes. Mr. H. Holland (Grey): Why should not the Government get the money direct' from the Wnks without the intervention of a middlornan? Sir Joseph Ward: I think that would be a very dangerous tiling to do. If tlio Government had gone to the banks for the whole of the money, the position of peoplo who wanted money for ordinary purposes would havo been made very difficult indeed. The banks would not have been in a position to mako any further advances. i