The Dominion THURSDAY, SEPTEMBER 30, 1920. THE LOAN BILL

Dominion, Volume 14, Issue 4, 30 September 1920, Page 4

The Dominion THURSDAY, SEPTEMBER 30, 1920. THE LOAN BILL

—. Although it is an important neasurc, the Loan Bill laid, before Parliament, yesterday is of moro imitcd scopo |than was generally sxpcctod. So far as new borrowng is concerned, it deals onlv with he raisins; of the considerable sum itill required for tho purpose of ettling discharged soldiera on the and or providing them with town lwellings. It has nothing to do vith borrowing for public_ works, lousing (except in connection with repatriation), and other purposes 'or which loans will be required as ;imes goes on. Under the Bill, Parliament is asked to authorise a oan of six millions, and the Prime Minister has stated that tho rate >f interest paid will be five and a lalf.per contT - By ruling standirds and in view, of the current inlation of money this is a low rate, mfc the 'loan carrics such a strong lafcriotic appeal that thero are good grounds for tho belief expressed by ;ho,Prime Minister that the whole ium required will be obtained at ;hc prescribed rate without resort ;o tho compulsory powers—a modiication of those hitherto in force— vhich are provided in the Bill. In new of the financial demands and lifficulties by which the country is 'acp.d it is imperatively necessary ;hafc all borrowing proposals should jc carefully scrutinised, and that inly absolutely necessary borrowing should be authorised, but,theyDoninion, of course, is bound to'honnir its obligations to -returned soldiers. The only stipulation to bo nade in this case is that tho money nust be used to the best advantage. Hio total financial provision made for soldier settlement runs into big figures. The sum of £12,500,000 was appropriated to this purpose Dut of the revenue surplus accumulated during the,war years, and further calls have apparently, been made upon tho remaining balanco of this surplus (which amounted tc rather moro than five millions at the beginning of tho current financial year). Mr. Massey mentioned yesterday that in addition to thf six millions it is now proposed tc borrow the Government anticipate! being ablo to transfer another million to the Discharged Soldiors : Settlement Account out of balances accruing in fnture. A total ox pendituro of well over twenty mil lions in financing soldier settlement is thus in prospect. Presumably however, finality in this undertak ing will at least be closely a,p proachcd by tho time tho appropria tion now proposed has been expended. Inpayments t>y /ioldior settlers already aggregated _ nearly a quarter of a million sterling pc: annum, and. this amount, of course will increase substantially as tim< goes on. Apart from its main purpose, th Bill contains a number of com mendable features. Sound judg ment is exhibited, for instance, ii the proposal that two and a hal millions of the , projected loai should ho raised by the. isrnio o inscribed stock availablo fgr tli payment of death duties. Unde this arrangement some people wi! find it much easier lo cuntribute t the loan than if they were require to 'subscribe under ordinary cond tions. At the sarno time it is a arrangement thoroughly sound frot tho standpoint of the State. I issuing stock available for tho pa; mont of death duties, the_ Goven ment is to some extent ant-icipatin future revenue, liufc at tho date _£ which this revenue would in. ordii ary course be collected, tho publi debt will automatically bo reduce by a like amount. Reasonabl safeguards are imposed against an trafficking in the special inscribe stock, but tho original holders ai to bo given the option of exchani ing it for debentures. Anothc judicious proviso authorises tl: Minister of Finance to draw upo tho Consolidated. Fund to tho o: tent of £50,000 por annum, in ordc to establish- a "depreciation fund with which to purchase loan stoc at any time when its price fal bolow par. A similar proviaio

might advantageously be embodied in all future loan authorisations;. Tho conditions of compulsory investment proposed in the Loan Bill are somewhat less drastic than those enaotecl in earlier legislation. IkCommissioner of Taxes may require any person who has not done so to contribute to tho loan an mount equal to his average annual laud and incomo taxation during the throe years to tho end of March, 19? C. Tho rate of interest to be p.iirl on compulsory contributions is three per cent., and tho penalty for resistance to tho compulsory levy is the imposition of a penal tax c mounting to twice tho amount of the land and income taxation for which the individual concerned_ is liable under the taxing legislation of last year. Since the proposed loan is ' indisputably _ required, in order that the Dominion may keep faith with returned soldiers, compulsory powers and attendant penalties no doubt will not require to bo enforced.