NEW ZEALAND WAR LOAN

Southland Times, Issue 24241, 26 September 1940, Page 6

NEW ZEALAND WAR LOAN

DETAILS GIVEN BY MR NASH MINIMUM OF £8,000,000 EXPECTED NO INTEREST UNTIL 1943 (United Press Association) WELLINGTON, September 25. The Minister of Finance, the Hon. W. Nash, announced tonight that arrangements had been completed for the issue of a war loan locally and prospectuses would be available throughout the Dominion by the end of this week. “As has been previously indicated, war expenditure during the present financial year is estimated at about £38,000,000, of which approximately half will be in New Zealand and the other half overseas,” said Mr Nash, “0f the amount required to be raised in New Zealand special taxation is estimated to provide £14,000,000, leaving approximately £5,000,000 to be raised by loan. In addition to this, £5,000,000 is needed for local requirements. As was pointed out in the Budget, we must endeavour to raise within New Zealand some portion of the amount required to meet expenditure abroad, thus relieving as far as possible the drain upon the resources of the British Government. The present loan issue is estimated to provide a minimum of £8,000,000, but, as set out in the prospectus, persons who have already contributed free of interest loans will have the option of converting them mt o .. f“ IS issue. Persons who have made gifts to the War Expenses Account may reduce their contributions to the loan accordingly.”

RATE OF INTEREST The prospectus provides for the issue of Government stock which will be non-interest bearing to October 1, 1943, and will thereafter until October 1,1935, when the principal is repayable, bear interest at 2J per cent, per annum. The first interest payment of £l/5/per cent, will be made on April 1, 1944, and thereafter payments will be made half-yearly. Any stock issued to an applicant in terms of the prospectus will be accepted at par at any time before maturity in payment of death duties in respect of an applicant’s estate. The price of issue is £lOO per cent, and is payable as follows:—On application, £3O per cent; on December 16, 1940, £4O per cent; on March 25, 1941, £3O per cent. The loan is being raised in accordance with the provisions of the New Zealand Loans Act 1932 whereby interest and principal are a direct charge on the public revenues of the Dominion. Applications for the issue of stock will be received by the Reserve Bank of New Zealand up to October 18, when the loan will close. The Minister of Finance has indicated that for the purposes of the Finance Emergency Regulations 1940. (No. 2) he will not regard any person as having subscribed in due proportion to his means unless such person has subscribed to this loan at least the amount of the income tax payable by him in respect of income derived during the year ended March 31, 1939, being the tax normally payable in February 1940, decreased in the case of individuals by £5O and in the case of companies by £7O. METHOD OF COMPUTATION For the purposes of computing this minimum subscription, which must be calculated to the nearest multiple of £lO, any income that was free of income tax in the hands of the recipient shall be deemed to have been subject to such taxation. Tax-free income which would be taken into account in this way includes dividends other than those, from companies incorporated in New Zealand, interest from tax-free Government stock and from tax-free company debentures, tax-free income derived from abroad and also farming income where the land used had an unimproved value of less than £3OOO. The Trustees Act 1908 authorizes trustees- to invest in Government securities and special provisions affecting trustees are contained in Regulation 20 of the Finance Emergency Regulations 1940 (No. 2), the effect of which is that no obligation or limitation imposed on any trustee by virtue of any trust instrument or otherwise shall prevent or excuse him from compliance with any direction, notice or requirement under those regulations. Copies of the prospectus and forms of cash application will be available within a day or two at the Reserve Bank, Wellington, district Treasury offices at Auckland, Christchurch and Dunedin, at any postal money order offices or from members of any stock exchange in the Dominion, but neither the banks nor stockbrokers will receive any commission, for their services. Commenting bn the issue Mr Nash stated that while all were expected to contribute the minimum in accord with their means, the prospectus was a general invitation to everyone to assist the war effort by subscribing as much as possible. “I hope," he said, “there will be a generous response to the invitations to subscribe to the loan, the proceeds of which will be used solely for equipping and maintaining our armed forces in the Dominion or overseas and for other war purposes.”