PARLIAMENT.

Taranaki Daily News, 3 August 1917, Page 4

PARLIAMENT.

HOUSE OF REPRESENTATIVES YESTERDAY'S SITTLMGS, By Telegraph.—'Press Association. Wellington, Last Night. The House met at 2.30.

Replying to Mr. Reed, the Minister of Internal Affairs said tile question of readjusting boundaries of counties north of Auckland was under consideration. It bad been decided to discard the whole work already done in this connection, and appoint a new commission to begin de novo. If requests were received from members, ho would consider the advisability of extending the scope of the commission to other parts of the Dominion.

the Premier laid on the table the re' port of tho Lands and Survey Depart' meat. WAR LOAN BILL.

The War Purposes Loan Bill was introduced by Governor's message. Sir Joseph Ward, said lie did not desire to claim urgency for the Bill, but he asked the House to pass it as quickly as possible, as it was necessary to do so before the prospectus for the loan was prepared, in connection with which there was a great deal of work. Mr. Sidcy asked if this course was being adopted in order to block his Definition, of Time Bill, which was at the hea,d of tho order paper. Sir Joseph Ward .explained that the Bill gave power to raise the £24,000,000 loan mentioned in tho Budget. He assured tho Home th»t tho provision lo wise the money extremely urgent, and lie could not imagine members refusing to pass it. The Premier promised to give Mr. Sidey another opportunity to move the second reading of his Bill, and on that understanding Mr.'Sidey withdrew his opposition. Mr. McConjhs protested against such an important measure being rushed through in a moving. On the second reading, Sir J. Ward said., the Bill gave power to raise £■24,000,000, of which £12,000,000 would bo raised in the Dominion. About six :t seven months later he proposed to raise the second portion of about £ 10,001),000, but it would all depend on tow the money stretched out. The in-

u.tusi • vguiu uc ih i.y-i per com., rree oi income-tax, lie could not agree to raise, the interest to 5 per tent., because that would be unfair to investors in the first loan, who, in a patriotic, spirit, came forward find subscribed so liberally. If this increase tool; glace, lie would, have to raise the interest of the first loan to 5 per cent. He was quite satisfied lie could get the money at tho lower rate, as only to-day he had. received offers from two'gentlemen of large sunns since they saw the statement in the budget. The Government was determined not to go out of tho country for the money, aiid it 'was the duty of everyone who had money to do their share. Air. Craigic: AVhy don't you take it as you take moil? Sir J. Ward: ''l want to tell the honorable gentleman we do not get money that way." Much of the. mpney would bo 'wanted during the next two months, iuhl they would be able to get it, in the way nroriosed under the Bill.' No t.rena-

nrer at the present juncture could afford to go off the beaten track to get money anil try experiments. That was why the profits tax was being abandoned, because ho could not rely on the amount to. bo raised by it, but he had every conf'dcnce in the patriotism of the people. Provision had been made to enable certificates to be sold at tliQ post office as in the ease of the previous loan* Clause "> provided thai securities to the Value of a million might be used in payment of death duties. This money would in the first instance be paid into

the war expenses account, but later the

Stamp Department could sell this stock, and then the cash received would be paid into the death duties account. Clause 0 provided for the validation of certain debentures in exchange for Treasury bills, and authorising the issue of further debentures in exchange for such bills. 1 his, Sir J. Ward explained, was ueecssnry to facilitate financial operations in London., Clause 7 provided for the payment by large financial institutions of subscriptions to the • loan as required, and the adjustment of interest and commission. This ivas usual. The terni of the debentures would probably be the same as for the last loan, but Uiat was a matter to be considered when drafting the prospectus, which must be made as attractive as possible. Mr. Isitt aslced if any prsvision was likely to be made to prevent the banks raising the rates of interest on overdrafts in eonsequoiicc of raisin" these loans. °

Sir Joseph Ward replied he thought that cpuld be provided for, but it 'was not advisable to dislocate ordinary business methods more than could be helped. H 6 had been considering the question of the sinking fund, which, at present, provided for the repayment of war loans in forty years. That coujd be varied later, but on the whole that period would be reasonable.

Replying to further questions, Sir ,T. Ward said that if lie made the'rate, of interest o or 5% per cent, with incometax, ho believed tlio money could bo raised, but he had been guided by experience in raising the "Victory" loan in London, where two options had been offered to investors. He was convinced the exemption from income-tax was the better course to follow. In all probability a loan campaign would be organised throughout tho Dominion at an early; date. Ho hoped to receive the cooperation of members.

Mr. Wilford said this was the most colossal proposal ever pub before the country, or, he hoped, that would ever be put before it. This money must be got, and he suggested depositors 'with the post office savings bank depositing this security with the banks in payment of" war bonds. He objected to the limitation of the bonds in payment of death duties, but agreed with the proposal to hold a loan campaign.

Mr. Lee thought that interest at 4| per cent., free of taxation, was all in favor of the large capitalist. In view of the heavy inconve-tax proposed, the large capitalist was bound to rush the loan. If the rate of interest was. fixed at 5 per cent, it would be attractive to ail classes, and the man who paid high income-tax would still contribute to the revenue: If the. large capitalist did not subscribe, then he must be told his share of the loan was so much, and he must be made to pay. Mr. Ruddo favored the higher rate of interest subject to income-tax. He also thought, tho certificates, would be more popular if the annual interest were paid Instead of being accumulated.

Mr. Pearce advocated paying fiva j>et cent, on the war certificates to a limited' amount. Dr. Newman advised the MJnfttei'to withdraw the Bill and bring down a pro-, posal to pay five per eept. all round. Dr. Thacker said the loan must be raised, but we ought to know something about where the money was going, as there was scandalous waste. Wis should «ull a halt and Lave a stock-rtildnj. Messrs Wilkinson and MeOallum opposed the exemption from income-tax. Dr. Okey advocated a differential J»t« in favor of email investors.

Mr. Field (Otaki) protested against the wasteful expenditure that was going on under the Defence Department, Mr. Massey, replying to the criticism on extravagance, mentioned the enormous expenditure in connection with the camps, where it had been determined to spare no expense to keep down epidemics. The question of transport also arose, an! then the men had to be maintained in England, where we seldom had less than 10 000 men. Hospitals had tb' be maintained, to say nothing of the maintenance of the men at the'' front. It waa a mistake to suppose our Jnen only cost 5s a day.. The cost wag nearer, .12s a day. Ho admitted there wfts He had seen it in (France, and it seemed inseparable from way. Our clerical staff in England numbered 270, bat another Dominion had a staff of 3000. The Government had been accused of refusing in< formation. That was uot so. JJe claim* od that wealth was. being., conscripted by means ; of the income-tax, and that any other method would do the greatest harm to the credit of the, Dominion, Money could not bo got from the banks by the weatlhy, booaufes; if OTaryono askod them to pay out. to the wv«anient at owe the banks could not possibly lend enough to nil and financial chaos would be the result; While eon' scription of wealth was'a vary attwe. tive theory, he was. sonfldeftl tt impracticable. As soon a# the enaof tikt war came, the extreme rate of wwaetax would cease gradually. The Imperial (Government had their hands full. They wore doing their share, and we must de our share. If the majority of member* thought the National Government a mistake, he was quite prepared to take the consequences; ijiijfe he was confident thatr any appeal to the country could only result in a sweeping majority for thj» National Government. SIR JOSEPH WARDS REPLY.

Sir Joseph Ward, in- reply; qaid & great deal of criticism had been based on positions which did ijot exist u| th* Bill. The idea, of the rich Ixji'ng favored jat the expense of the poor was a misconception- The people who raised; thif bogey forgot that if the'rieji.'peopl* did not subscribe their loan could not b» raised. In the last loan he gav# th» poor people a\ opportunity to subscribe, but only 123 pqoplo from the North Cfp» to tho Bluff-purchased £5 bonds;' Sucl* a result led to a fiasco, and no loan could be raised on that ftasis. In wply to the argument that t«e. ioan shpttld be raised at oj.per cent,', and bo subject to taxation, he said, that investment would return a rich man £3 Ss <W per cent., and if the loan was raised at i per cent, it; would return him £J Sfc.fiiL Was anyone insane enough to sugMg* that such return its that'would iqjl«c« anyo'no to invest in a loan Ilka vi»tt To prove that ,tho small investor, was getting encouragement 'to, invest he quoted the circular issued in the last loan t« show that the holders of certificate! received five per cent. Regarding the term of the loan, the experience of the, last loan showed that tho of investors favored twcnty.five ye/w*. but all classes were being eatwsdi.Jor, hope* different periods were arranged for in the Bill. A comparison between, tb« rates of interest paid in New Zealand afii Britain waa out of- tho question, because the conditions were not normal. It was the mature,d«?is|«n of the Government that the loan must be raised in the Dominion, and though they had been told that rich people were going to rush the loan, the opinion wa# ftat it would not be raised tvitbout a campaign, and he asked everyone to assist in such campaign to the best of; his abilities.

Ho believed that if the necessity Hjrole the people of the country would be ready to ,eivo up all they possessed to tava tlio' Empire, but. the ijptiftJ},. <& tion of 'wealth suggested in tie debate was nothing short of robbery, while the method proposed in the budget w>J legitimate. Ho was not gwng to turn from the acknowledged paths to r»k« the revenue necessary to maintain, the soldiers in the field at this juncture, the duty of the Government and cfthe people was to get the money to enable us to win the war, and we must do it in such a 'way as would not eontravena the principles of political hopesty. Disaster to this loan would mean 'disaster to the Dominion. The Bill was read a Be£o»d time, and, the House rose at 10.12.