The Daily News. THURSDAY, AUGUST 30, 1917. COMPULSORY CONTRIBUTION TO WAR LOAN.

Taranaki Daily News, 30 August 1917, Page 4

The Daily News. THURSDAY, AUGUST 30, 1917. COMPULSORY CONTRIBUTION TO WAR LOAN.

4 Now that tbe provisions of the Finance Bill are available, the full force of the Budget proposals can be ascertained. The most striking and novel feature of the Bill will probably bo deemed to be the section dealing with compulsory sub- ■ ''us to tho war purposes loan. . .„- ..n.iijiy this drastic provision has been devised with tbe object of ensuring that the war burdens shall be carried by all classes of the community on an equitable basis according to means. but, like all such measures, it is probable that many cases of hardship will be created. It seems to be an unpleasant reflection on the Dominion that it should bo necessary to wring loan contributions out of the wealthiest, portion of the community, though in theory it is only just that willing patriots should not have to supply the much-needed money while others hold back. If there is—as inevitably there must be—national sacrifice and national effort, it must be universal and not partial. The conscription of men took no heed of whether the units required were rich or poor, and money is an equally urgent necessity for obtaining men, so that being without the needful funds for placing them in the firing line would be useless. The Minister for 'Finance has no sympathy for those whose taxable incomes amount to £7OO a year and over. If they do not contribute to the war loan for any reason, however urgent, then he will compel them to do so. Not haying the money available for the purpose is, according to Sir Joseph Ward, no reason why they should not subscribe. It must be borrowed.. This solution is undoubtedly unanswerable—in theory. When the Government wants money it borrows, and there's an end of the matter, for sooner or later it is the people who pay. But if a business man borrows money for two years which he cannot get back for, say, ten years, he h facing a rather still' hurdle. If, however, the Government made an arrangement with tho banks 'whereby they would be compelled to advance the amount of any of their clients' contributions to the war loan for the full period of the loan for at least till three years after the end of the war, the position would be different. What will be the position in 1918 when another war loan may, and probably ■will, be floated? The Finance Minister, in his pardonable zeal to make the war loan a thorough success, has evidently overlocked some very important factors at present affecting business men. He naturally regards the incomes of individuals from the point of view of the Income Tax Department, than which nothing is more misleading, for the Department has the power to regard legitimate business payments as profits, allown only very restricted items of depreciation, collects income tax ton doubtful debts held in suspense ocoouat, and m^

no allowance for any portion of book debts other than for those actually 'written off as hud. Again/ Sir Joseph Ward must surely know that at the present time a merchant or trader with a large business requires three times the capital to carry the same stock as he did before the war. It does not require a financial genius to deduce from this state of affairs the fact that not only

";ist the greater part of profits be compulsorily left in business to provide the necessary working capital, but that the ■bank overdraft is right up to the limit. If the cash system were universal matters would not be so diflieult, but it is not. Therefore, although a man's income, tax statement may show a profit in 1010 of £IOOO, ho may actually have no money at command over and above bis actual business needs. Sir Joseph Ward has stated that it may even be necessary for some people to borrow to pay their taxes. We can quite believe it, but is thai; a just rea.son why the merchant or trader, or professional man, should bo compelled to borrow money for the war loan? If so, then the Minister is creating a trouble that will seriously affect the Dominion. It is quite conceivable, that, there are many wealthy people in New Zealand who have so far refrained from doing their share in easing the financial burden of the war, although they -have the money at hand and could contribute generously if they wore so'inclined. Ji is this class on whom might be applied compulsory pressure without any hardship resulting, , b ut ,„,. tllo , c mcu w]lo have to find, say, £IOO for income tax and land tax to bo called upon to tind a further .£3OO for the war loan will certainly press severely on a great number who are already sorely put to if, to meet their ordinary financial obligations. The right of appeal is given, but as this is subject to regulations by Order-in-Council, it is not to be expected that much, benefit will accrm: to those who do appeal. The .Minister ha, a" obvious duty to perform in raisinthis loan, hut he will do well to re" consider the compulsory clause so 11,,; business men and other legitimate ca-c----of inability to find the money may l, c treated with due consideration.