THE COMPULSORY LOAN

Evening Post, Volume CXXX, Issue 84, 5 October 1940, Page 8

THE COMPULSORY LOAN

MR. NASH STATES HIS POLICY

NO "PRINTED" MONEY

The emphatic assertion that the Government intended to use the power that it has to provide for the defence of New Zealand and for the Dominion's part in the defence of Britain was made by the Minister of Finance (the Hon. W. Nash) in the House of Representatives yesterday afternoon when replying to the debate on war finance. *"We are not going to argue with anyone," he declared, "but we will be fair. If someone has control of goods expressed in money and they are needed to defend the people, we are not going to argue. We have to defend this country, and the only way is to take the goods that we produce and use those goods."

Keplying to specific points raised in the discussion, Mr. Nash said the Opposition statement that the bonds would be worth £65 was unadulterated humbug. On today's market on the basis of 3& per cent, they would be worth £82. He said that interest rates today were lower than at any time .before the Government came into office. "Our securities today are showing a less return for £100—which means that they are more valuable— than at any period before we were put in charge of the country," contended the Minister. Mr. W. J. Poison (National, Stratjford): That is overseas. Mr. Nash: No, in New Zealand. They are quoted at £3 8s Bd, and no previous Government was able to raise loans at less than that figure. The Minister quoted the price of New Zealand 5 per cent. Stock 1956-58 abroad as £107 12s 6d on "September 26, and comparable Australian Stock at the same time was listed at £102 15s. "Is there something wrong with the prestige of Government securities" he I asked. j "WE WILL TAKE EVERYTHING." Mr. Nash said that there would be a little more than 18,000 people liable under the war loan, 15,000 of them individuals and 3000 companies. This was only part of the Government's policy of conscripting wealth. . The Hon. Sir Alfred Ransom (National, Pahiatua): Are you going to take credit as well as wealth? j Mr. Nash: We will take everything. This country's effort will be measured by' the willingness of everyone to sacrifice, and a greater sacrifice in the fullest sense of the term on the part of those who have more than those who have less. He quoted figures to show that a single man with an income of £600 would be liable for £10 and the man with £700 for £20. Was that hardship? On the £2000 maximum the liability was, £310. A single man with an unearned income of £ 2000 maximum would have to subscribe £430. There would be difficulties for those j who were liable for 10s to 15s in the £ income tax. There would be £80 out of the £100 still "there, and that would become more as the years went j by. ■■-.■■■■■ COMPULSION QUESTION. There was no compulsion in the proposal in the first sense, said Mr. Nash. People had the opportunity of putting in their applications voluntarily and willingly up to a specified date, and \ he believed there*-would be a big percentage of the people who would be anxious to subscribe, but there would be some who would never subscribe voluntarily and the measure was for them. Dealing with the question why no interest was to be paid during the war | period, which had been estimated as three years, Mr. Nash said that interest transferred the right to use certain goods without price. The Government i said it had the right to use all the goods it required for the war for three years without paying anything for the right to use the goods. After that the Government paid £2 10s every year for every £ 100 worth of goods the Government used, but at the end of the period the Government gave back the goods to the person who had the title for the goods. Taxation made available to the State a certain proportion of everybody's goods without recourse to getting them back, and loans made a further proportion of a person's goods available. Free-of-interest proposals provided that those who had control of wealth should relinquish that control for the time being free of charge to the State so that the other man who was fighting for the existence of the State and the protection of the others could have thosp goods to enable him to live and to fight. "COMPLETE TREASON." It was complete treason to say that the difficulty would be overcome by printing a lot of money and issuing it without recourse to the ordinary people for them to buy goods with, Mr. Nash continued. Mr. Poison: That is one thing we are agreed upon. If he wanted to destroy the economy of any country, said Mr. Nash, lie would destroy its currency. He knew what inflation meant. It was not control in the ordinary sense of currency and credit. It was uncontrol. The Government was pledged to the limit to control credit and currency, to try to find a way to the limit of using the. power that was in credit control, but to issue money without any goods being there was a crime against the State and meant a definite deterioration of every individual in it. Mr. W. S. Goosman (National, Waikato): We say "Hear, hear." Mr. Nash: That doesn't make it right. (Laughter.) Continuing, Mr. Nash said he thought it should he said that some of the best people in this country were being deceived by the type of propaganda to which he had referred, and it was being put over with no belief behind it.

Mr. Nash paid tribute to the people who had contributed loans voluntarily. They were the cream of the country in many cases, he said.