VICTORY LOAN.

Manawatu Herald, Volume XLI, Issue 2027, 11 September 1919, Page 3

VICTORY LOAN.

ITS PURPOSES. EXPLANATION BY FINANCE MINISTER. A statement regarding the Victory • Loan was made by (he Minister of ‘ Finance (Sir James Allen) in the House of Representatives on Tuesday, The Minister asked that members should assist in. every way they could to make the loan a success. He explained the various ways in which the public might invest, and emphasised that the small investor particularly was given the opportunity to subscribe, either in Post Office inscribed stock, or war bonds. This was.the Victory Loan, and everybody who wished to do something to help carry on the country now the war was over ought to subscribe. Authority was given last session to borrow twenty millions and ten millions. About fourteen millions of this had been subscrib- „ ed on the prospectus of the old loan.

Mr Holland: “Did you not promise gj to consider whether it could he made taxable?” The Minister: “Not this loan.” He explained that as a portion had been subscribed on the old prospectus, which fixed the rate at 41 per cent, free of income tax, the prospectus now issued provided .for the same conditions. When this loan was issued there would still he authority left for some six millions, but he did not think it would be necessary to call for that until Parliament mot again. Applications must be in by 25th September. A sum of £375,000 of the loan had been reserved and made available for the payment of death duties. Trustees and others might utilise (rust funds for subscriptions. Ho wished to call special attention to the compulsory provisions. They were used with respect to the last loan, and they would be used with respect to this one. The last loan, however, Avas .subscribed freely, and the compulsory provisions ■ were only put into effect in a few cases, and whore they Avere put into effect subscribers only received 3 per cent. A member: “Were there some who received 3 per cent. The Minister: “There Avere, and if the compulsory provisions have to be put into operation (lie rate will be only 3 per cent.” Some persons Avhu did not subscribe to the last loan would be compelled to subscribe avlki t- they should have subscribed then and also to this loan. With regard to the purposes of

the loan, the Minister slated that the ’cost of the war at one lime amounted to If millions a month. It was now down to about half a million. They had still to meet the cost of the portion of the Expeditionary Force in England, the* men returned but not yet discharged, the sick and wounded in hospital, vocational and curative training, and all work done by the Repatriation Board. He hoped to arrange for the payment' of the gratuities out of the loan, but was not quite sure whether it could all he met in this way. The Loader of the Opposition (Sir Joseph Ward) supported the ■Minister’s appeal. Ho proceeded to refer to the proposal that loans should be made subject to taxation, since be was not in the House when the matter was under discussion previously. Ho could not understand, lie said, how any friends ol Labour could try and induce the Government to increase the rate of interest in this country —for that was what the proposal amounted to. Had it been increased to 51 per cent, rents would have gone up, the cost of money to small meii would have gone up, mortgages would have had to hear a higher rate, aml the people to suffer most would have been Ihe workers with small incomes. Money 'in New Zealand had been cheaper than in any other country throughout the war. In Canada a loan was issued at 51 per cent, free of tax at tv discount; in the United States the same; in Groat Britain a 4 per cent, loan free of tax was issued at a discount of 20 per cent. No seriousminded,man wanted to see the cost of workers’ homes or farmers’ mortgages raised. He asked if an arrangement had been made as previously for the banks to adranee money to enable people to invest in the loan.

Sir James Allen replied that this * had been done. Mr Holland: “Why not lake it direct from the hanks?” Sir Joseph Ward replied that the hanks would then be unable to linanee the industries of the country. In reply to a question. Sir James Allen said that persons who had subscribed to the previous loan under this authority would be able to count their subscriptions in considering the amount called for under • the compulsory clauses.