The Southland Times FRIDAY, SEPTEMBER 27, 1940. A Compulsory War Loan

Southland Times, Issue 24242, 27 September 1940, Page 4

The Southland Times FRIDAY, SEPTEMBER 27, 1940. A Compulsory War Loan

pRITICISM of Mr Nash’s war loan v proposals is likely to be concentrated on three points: the use of compulsion before a voluntary loan has been attempted, the severity of the terms offered, and the equality or inequality of the method of assessment. It does seem unfortunate that the Government should have chosen to exact money by compulsion before inviting voluntary subscriptions from persons who could not see their way to make interest-free loans, but whose feelings of patriotism would certainly have led them to invest to the utmost of their ability in war-loan stock at a low rate of interest. In an interview earlier in the week the Minister of Finance declared that the word “compulsory” applied to the loan was a misnomer, since compulsion would be used only when persons expected to contribute according to their means, failed to do so. But this has proved to be a mere quibble: the-terms of the loan make it clear that investment in the new stock by persons who pay income tax exceeding £5O and by companies who pay income tax exceeding £7O will be as compulsory as the payment of taxation. The only difference appears to be that whereas a Government department assesses and levies income taxation, the size of each contribution to the war loan has to be determined (by none too simple a calculation) by the person or company liable. Compulsory military service was not introduced until the voluntary system had been tried and found wanting; moreover, soldiers are paid, not after their third year in the army, but from the day they enter it. Would the Government not have been wiser, and more fair, if it had followed a similar procedure in raising war loans, inviting subscriptions for stock at a low rate of interest (comparable with the level of soldiers’ pay) and using compulsion only when the voluntary method failed? Equality of Sacrifice

If compulsion is to be used from the very beginning, the questions arise whether the method of assessing contributions is equitable and whether the total sum to be raised is being kept to the lowest level. Mr Nash has reaffirmed that the loan will be used “solely for equipping and maintaining our armed forces in the Dominion or overseas, and other war purposes.” In other words, the money compulsorily raised Will not be spent directly on other than war activities. This is right and proper; but the fact remains that if expenditure on projects not connected with the war had been reduced as it should be, and as - courageous and sensible Government would reduce it, the sum to be raised for war purposes over and above taxation would be much lower than it is.' In terms of military expenditure, the Dominion is making the big contribution of £40,000,000 to the Empire’s effprt; but it is spending another £60,000,000 on public works, Social Security and normal State services. Those who are liable for contributions to the war loan would make them more cheerfully and readily if they could feel that they were being asked for no more than was required to prosecute the war after other State expenditure (including expenditure which is not merely extravagant, but dangerous, in war time) had been cut to the bone. As for the equity of the method of assessment, a strong case could be made for setting the income tax exemption limit at £lO, or even lower, rather than at £5O and £7O. If money, like men, is to be conscripted, should not all incomes above a minimum figure, like all men between a minimum and a maximum age, be liable for service? It is reasonable that family responsibilities should be taken into account on both sides —in the order in which men are called up and in the degree in which incomes are levied for loans. But equality of sacrifice in war time should not end with the conscription of man-power.