WAR LOAN

Taranaki Daily News, 26 September 1940, Page 8

WAR LOAN

By Telegraph—Press Association.

DOMINION ISSUE

£8,000,000 WANTED PR0VIS10NS EXPLA1NED

Wellington, Last Night. The Minister of Finance, the Hon. W. Nash, announced to-night that arrangements had been completed for Ihe issue of the war loan locally and prospectuses would be available throughout the Dominion by the end of this week. "As has been previously indicated war expenditure during the present financial year is estimated at about £38,000,000, of which approximately half will be in New Zealand and the other half overseas," said Mr. Nash. "Of the amount required to be raised in New Zealand special taxation is estimated to provide £11,000,000, leaving approximately £5,000.000 to be raised by loan. In addition to this £5,000.000 needed for local requirements, as pointed out in the Budget, we must endeavour to raise within New Zealand some portion of the amount required to meet expenditure abroad, thus relieving as far as possible the drain upon the resources of the British Government. The present loan issue is estimated to provide a minimum of £8,000,000 but, as set out in the prospectus, persons who have already contributed free of mterest loans will have the option of converting them into this issue. Persons who have made gifts to the War Expenses Account may reduce their contributions to the loan accordingly." Details of Interest. The prospectus provides for^ the issue of Government stock, which will be noninterest bearing to October 1, 1943, and will thereafter until October 1, 19t»2, when the principal is repayable, bear interest at 24 per cent. per annum. The first interest payment of £1 os per cent. will be made on April 1, 1944, and thereafter payments will be made half-yearly. Any stock issued to the applicant in terms of the prospectus will be accepted at par at any time before maturity in payment of death dutiesin respect of the applicant's estate. The price of the issue is £100 per cent. and is payable as follows: On application, £30 per cent.; December 16, 1940, £40 per cent.; March 25, 1941, £30 per cent. The loan is being raised in accordance with the provisions of the New Zealand Loans Act, 1932, jwhereby interest and principal are a direct charge on the public revenues of the Dominion. Test of Subscription. Applications for the issue of stock will be received by the Reserve Bank of New Zealand up to October 18, when the loan will close. The Minister of Finance has indicated that, for purposes of the Finance Emergency Regulations, 1940 (No.^ 2) he will not regard any person as havmg subscribed in due proportion to his means unless such a person has subscribed to this loan at least the amount of income-tax payable by him in respect of income during the year ended March 31, 1939, being tax normally payable in February, 1940, decreased in the case of individuals by £50 and in the case of companies by £70, For the purposes of. computing this minimum subscription, which must be calculated to the nearest multiple of £10, any income that was free of in-come.-tax in the hands of the recipient shall be deemed to have been subject to such taxation. Tax-free income which would be taken into account in this way includes dividends other than those from companies incorporated in New Zealand, interest from tax-free Government stock and from tax-free company debentures, tax-free income derived from abroad and also farming income where the land used? had unimproved value of less than £3000. The Trustees Act, 1908, authorises trustees to invest in Government securities and special provisions affecting trustees are contained in regulation 20 of the Finance Emergency Regulations, 1940 (No. 2), the effect of which is that no obliga'tion or limitation imposed on any trustee by virtue of any trust instrument or otherwise shall prevent or excuse him from compliance with any direction, notice or requirement under thos? regulations. Prospectuses Soon Available. Copies of the prospectus and forms of cash application will be available within a day or two at the Reserve Bank, Wellington, the district Treasury offices at Auckland. Christchurch and Dunedin, at any postal money-order offices, or from members of any stock exchange in the Dominion, but neither banks nor stockbrokers will receive any commission for their services. In connection with this loan, commenting on the issue, Mr. Nash stated that while all were expected to contribute the minimum in accord with their means, the prospectus was a general invitation to everyone to assist the war efforts by subscribing as much as posible. "I hope." he said, "there will be a generous response to invitations to subscribe to the loan, proceeds of which will be used solely for equipping and maintaining our armed forces in the Dominion or overseas and other war purposes."