War Loan Stock for Small Investors

Southland Times, Issue 24874, 14 October 1942, Page 4

War Loan Stock for Small Investors

WITH an objective of £350,000, the second Liberty Loan campaign is now well under way in Southland. Applications for the first two days total £10,220, apart from advance subscriptions made direct to the Reserve Bank. No doubt word will come within the next week or two of the amounts subscribed by large financial institutions and companies, which have been asked to give generous support to the loan. Persons of substantial means also have an obligation to contribute in proportion to their resources. Yet it is clear that the loan cannot be fully subscribed without the assistance of small investors—the rank and file of the population. The Reserve Bank has evidently decided not to repeat the experiment of issuing £1 Liberty Loan bonds (though National Savings bonds will be available as usual). But that is no reason why the man of moderate means should not contribute some part of his income. Inscribed Stock is available for investors who can afford to set aside anything from £lO upwards. It is true that living costs are high, that there have been heavy increases in taxation and that many of those with funds in hand are already doing something practical for the war effort. But the Liberty Loan has a special claim on the pocket of the wage-earner. People earning up to £8 a week have at their disposal 60 per cent, of private income in New Zealand. If they withhold their support, the only alternative method by which the cost of the war can be met is inflation; and that is a method which is likely to hurt the lower-paid sections of the population more than anyone else. The primary purpose of war finance is to restrict civilian consumption so that men and materials can be set free for fighting. This purpose cannot be achieved unless the mass of the people—the 80 per cent, of wage-earners who have 60 pei’ cent, of the private income—surrender some of their spending power, as they are now asked to do, until after the war. But there is a further reason why people in the lower and middle income groups should be encouraged, and should themselves try, to make some contribution to war loans. For the sake of political and social stability after the war it is important that war loan stock should be distributed among the different classes of the population as nearly as possible in the same proportions as the national income is distributed. If such a distribution can be brought about, no class will have cause to feel after the war that it must work in order to produce “unearned income” for some other class. Each class will contribute taxes to meet the interest payments on war loans, and each class will receive interest in approximate proportion to what it has contributed. In other words, with an equitable distribution of war bonds and stock the payment of interest in the post-war years will not become the political and social problem—or even the financial problem —that it may be if the bulk of Government stock goes into the hands of a single class.

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