THE DEBENTURE TAX SCARE.

Temuka Leader, Issue 2340, 7 April 1892, Page 3

THE DEBENTURE TAX SCARE.

The following extract from a speech by Mr H. It. Grenfell, the chairman of the National Mortgage and Agency Company, at the annual meeting of the company in London on the 10th of February last, will show the amount of mischief Mr ithodes was near doing by his last speech in Temuka :—" We have seen sundry articles and speeches on the subject, and not long ago we had a letter from our general manager in New Zealand, Mr Ritchie, which informed us that he thought the effect of that Bill had been ' rather exaggerated, and that, so far as this company is concerned, we shall not have to pay more under this new tax than we did under the old property tax. By the same mail, reached us an expression of opinion on the part of the i Prime Minister of New Zealand, which deals with the same subject. A correspondence took place between a Mr Twomey, of Temuka, and the Prime Minister, in which the former asks—- ' Ist. Is it true that money borrowed on debentures in England and lent on mortgage in this country _by locallyregistered loan companies, is subject to double taxation —that is, a mortgage tax, as if the money were a portion of the company's own share capital, and a debenture tax under clause 2, schedule C, of the land and income tax ? 2nd. Is the debenture tax a special impost placed on debentures for some special reason, and what reason ? I may tell you that my object is to publish your reply. I have spoken to several persons on the matter, and no one seems to understand it, and hence my action in writing to you.' In reply Mr Twomey received the following telegram from Mr Ballanco :—' There is some doubt as to the meaning of the foreign debenture holders' clause. The indention, however, was that there should be no duplicate taxation ; that the same money should r.ot be taxed twice over, and this will be made clear before any tax is collected. If you look into the Act you will see that there is reference to duplicate taxation, and the meaning can be deduced from these words.' Almost at the same time that we received that, the present Agent-General for Ne,v Zealand, Mr Perceval, wrote a letter to the London Times, in which he declared that there never was any intention of taxing debenture holders in the mode which appeared to be intended by the clause. At the time your report was sent out, and when we wrote the paragraph which you see concerning it, we were of opinion that the question was quite settled, seeing that the AgentGeneral and the Premier of New Zealand agreed in saying that there was no intention to make that double taxation. But, subsequently to the sending out of your report, to our great surprise we received a copy of the Otago Times, in which a Mr Rhodes, who is connected with the Northern Investment Company of New Zealand, writes to the Property Tax Department in Wellington and asks what they consider to be the meaning of the clause is question ; and Mr John McGowan, who is acting for the Commissioner, makes out a statement of the indebtedness to be incurred by that company to the New Zealand Government under the Act, by which Ave find that under the head of income tax he lays a tax of 5 per cent upon the interest of the debentures. As acccording to the clause the only relief that the company gets is the permission to levy that from the debenture holders themselves, I need hardly say that that does not make it a bit more satisfactory. I was so struck with this extraordinary discrepancy between the views of the Commissioner of the Property Tax and those of the Prime Minister and the Agent-General, that I thought I would go and see Mr Perceval himself. I went to him, and he told me that he himself was Chairman (I think) of Committees at the time the Act w*»s passed, that he considered the view that the clause would carry this power of taxation a very foolish one, but that he absolutely adhered to what he stated in his letter to The Times, and that we might make our minds quite easy that there would be no attempt to tax the company or the debenture holdors in respect to the debentures, I think we may take the word of the Prime Minister as to what he understands the meaning to be, and of the Agent-General that there is no intention of acting upon that clause, even if the Commissioner's interpretation was correct. Well, then, if that be the case, and they do not act upon the apparent contents of that paragraph, the taxation will bo no greater —in fact, I believe it will be somewhat less —under this new Bill, than under the old Property Tax Act,"

ALLEGED LIBEL. The libel action by Mr Geo. Hutchison. M.H.R., against the Hon. J. Ballance and J. J. Boyle, manager of the Wanganui Herald commenced yesterday morning at "Wanganui. The claim is that the plaintiff at the time of the alleged libel' was a Member of the House oil Representatives for Waitotara. In the last session a Bill was introduced by the Premier by which the payment of members was proposed to be increased. Plaintiff, in Parliament and at a public meeting at Patea, spoke of the Bill as a hishonest measure. Defendant afterwards addressed a meeting at Patea and a report of tho speech appeared in the Herald of Bth December, and ihe Yeoman of of 12th December, containing the following words concerning the plaintiff: —" Mr i Hutchison had told them that the Payment of Members Bill was a dishonest measure, but he forgot to teit them that he had signed a paper in the lobby of the House to the_ effect that he was in favour of the Bill " meaning thereby, that although professed to be, opposed to the Payment of Members Bill #s

ii dishonest measure, he acted so as to promote the passing of the Bill, with the object to increase the payment of members, including himself;. defendant Boyle was publisher and defendant Bullauce was a j proprietcy; m£ rtie said newspapers, in which j (■ho words set forth were published. The said publications were false and malicious, and plaintiff prays for judgment for forty shillings, and an injunction against each . defendant to prevent any further pubE- > eatings \*f thq said libel or any word.same effect. - to Mr Hutchison conducts 1>?~ Sir R. Stout aivUlvSte"*- ,"* own case. Ballanco, %w \ Mi- »>• . - 01 ' d WV™? f <f Mr \U ■\t\\ J tv f ' , ~ --armcoat lor Mr Boyle. luuw- ' " opened his own case in a ctudrcss, in the course of which he argued that though Mr Smith, M.11.R., had i been given by Mr Ballance, as the authority ; for tiic statement, he contended that Mr ' Ballance must accept responsibility.