FINANCING THE WAR

Nelson Evening Mail, Volume 77, 16 October 1942, Page 4

FINANCING THE WAR

TAXATION, INFLATION. LOANS \ I)DRESS ON SECOND LIBERTY LOAN Wellington. OH 1 < ( “There arc only three ways of tin j ancmg this war by taxation, by loan. . or by inflation and the last-mentioned would be almost as bad as having the ! } the Governor of the Reserve Bank. Mr , \V. F. L. Ward, in an addles: last night. ; on the second Liberty Loan. A total of £17,500,000 of the £**'. j 000.000 which it was necessary 1" raise) lor war purposes this year had already) been übsenbed leaving 10,000,000 to be found by way of Urn second Liberty) Loan. The amount need not : top there.; -In fact.” said Mr Ward, "the more | there is contributed now the less will j have to be found foi future loans, for | this will not be by any means the last j war loan that will have lo be raised m New Zealand.” Bank return.- showed that there wa, ample money in New Zealand t" finance . the loan many times over; so that there was no excuse at all for failure to sub- ! scribe the amount required. Everyone should examine his finances closely and put into the loan all he . possibly could. "It may hurt now—and hurt still more as we go on—but it has i to be done. This is going to be a crucial j year, so we must, if necessary, be preI pared to tighten our belts,” said Mr j Ward, “for we cannot let our boys) j down, nor the Empire nor our Allies. ; They are all doing splendid work, and ! it is up to us on the home front lo do : likewise.” For those people who could not find the necessary amount of money, arrangements had been made with the j trading banks to assist to the utmost. I They would make advances up to 90 per cent, of the amount subscribed to i the loan. If a man wished to subscribe £IOO, he paid down £lO now- and the ] banks would find the rest and charge ! interest on the day-to-day plan at the I low rate of per cent, per annum. ; The subscriber would have the right • to repay at any time within six months. It was necessary to make the term fairly short, otherwise the tendency would be inflationary. Repayment was to be made at the rate of 15 per cent, of the . amount subscribed for each of the six ; months. At the end of that period the \ loan would be fully paid and the bond j or inscribed stock handed over by the j bank. The loan could be taken up in inscribed stock for amounts of £lO and j more, in death duty stock for amounts of £lO and multiples thereof, or in • stock certificates, generally known as ! bonds, which were transferrable by hand. These had interest coupons atj tached; but there was a limit on the j minimum amount of these bonds that i could be taken up and that was £SO | and multiples of £lO thereafter.