The Daily News. SATURDAY, JULY 10, 1915. NEW ZEALAND'S WAR LOAN.

Taranaki Daily News, 10 July 1915, Page 4

The Daily News. SATURDAY, JULY 10, 1915. NEW ZEALAND'S WAR LOAN.

Although no definito decision has yet been made by the Government as to the method of raising the ten million loan necessitated by the war, there is good reason for assuming that it is intended to rely on tho peoplo of the dominion for as much as possible of the amount. The Colonial Secretary has been, and is still, in correspondence with the Homo Government relative to this loan, probably as to the amount that will be expected to bo raised in New Zealand, aiul until that point is settled it- is hardly likely that any steps will be taken to invite subscriptions locally. The attractive prospectus issued by tho I'm perid Government in connection with its t: 100,000,000 loan, and the phenomenal response made thereto, has probably caused the dominion Government to favor a similar course here, but such a step must inevitably be viewed with concern by nut a few of our financial men. It is admitted Mult there is a very large amount, of money in being in the country in the shape of fixed deposits and free deposits (current accounts I in the banks, but in the abnormal circumstances of the time, the iafluence of the war upon the world sit large, even to its remotest part, it is held (bat there is not a penny too much, figuratively speaking. It must be .e----membered that in all probability a considerable sum of New Zealand nnmey will be invented in the Imperial w:ir loan, and, as one financial expert put il. in the course of an interview with a, reporter: "It must have but one effect, and that will be to diminish the amount of money required for our local trad*', and lock it up in Government serin, which is not liquid. The moneys on current account are, the savings bank deposits are. The position in New Zealand is quite different from that of London, where, in normal times, all descriptions of gilt-edged securities can be immediately turned into cash at the price of: the day. No such market exists here," The existence of a plentiful supply of money in Now Zealand at the, present I time is easily accounted for. Til the first place, all our last season's produce has practically been paid for, and, on the other band, owing to shipping and other difficulties, imports from overseas have materially fallen oil', but when tho full tide of imports is again in evidence money will be required to pay for the goods. It stands to reason, therefore, that if the Colonial Treasurer succeeds in raising in the dominion anything like, five millions for his war loan that amount of cash will be diverted from trading purposes. Another effect of lessening the supply of surplus funds will be the advancement of rates of interest on mortgages, and it must not be forgotten that when the moratorium

is lifted a substantial amount of money will 1)0 required on that account. Although Xew Zealand is prosperous, it cannot be said to he rich; moreover, it is still in the development stage and shortage of funds for that most urgent work must seriously retard progress. Frani a banker's standpoint the move money kept at the banks the better it •is for them, but we need not have any anxiety 011 their account, for, whatever happens, the banks are sure to come out 011 top. At the same time, although it is advantageous to have the wliole of the. loan raised in London, there is a moral duty 011 the part of New Ze".landers to ease the enormous financial

■strain on the Old Country. 111 the past we have practically been obliged to resort to outside, help in finance, but ;fc is only just that at this crisis wo should all do our best towards raising at least a fair portion of this war loan. The post cilice deposits might and probably would be considerably affected, but the. savings of the people would be well employed iii lessening the strain 011 Britain, besides which the interest (presumably four and a half per cent.l would bo. a great boon to fhe people and stimulate thrift. Were it not for the exceptional circumstances under which j-tho whole of the Kinpire is placed at present, thero would be no question of tlio policy to be adopted, but we must I face the stern facts ag t'hey exist, and riso superior to all littleness. This can only be accomplished by making sacrifices that count, and helping to furnish the sinews of war is tho paramount call of the moment.