WHERE THE MONEY GOES?

Wairarapa Age, Volume XXXII, Issue 10046, 21 July 1910, Page 4

WHERE THE MONEY GOES?

Mr Harold Beauchamp, chairman of the Bank of New Zealand, has been recently interviewed by an Auckland Herald representative regarding the investment of New Zealand capital in London as disclosed in the quarterly banking returns. There is an abundance of money seeking an outlet in some shape or other at the present time, but Mr Beauchamp is of opinion that there is some hesitation about locking up 'money in the Dominion, and banks find it more ad • vantageous to invest the surplus in short-dated loan? in London. This lack of confidence, Mr Beauchamp, and other with whom he has discussed the question, attribute to the Death and buccession duties passed last session. Under that Act estates of £40,000 and upwards left to relatives pay 20 per cent to the Crown, and the money has to be found within a very short period of the death of the testator. He is of opinion that the instant withdrawal of such a large sum as this from any trade or 'industry is calculated to produce financial embarrassment. Though it is claimed that there is every justification for a tax on inherited wealth which passes from father to sons or daughters, in many cases • the sons help to contribute to the wealth of the parent, and it seems hard with respect tn such estates I that sons Bhould be taxed so heavily ;

on their own enterprise., industry, and ability, Under the operations ol a similar Act in the United Kingdom, large sums of money are being transferred from the Old Country to other countries for investment, notably Canada. Mr Beauchamp says it is within his knowledge that several people in this country are also now seeking to invest outside of New Z«aJand, with the object ot escaping the I tax in question. Personally, he thinks it unwise that in a new country such as this that we should follow the example of the Motherland. Only a small percentage of the people of this country come under the provisions of this Act in comparison with the population; still it is striking a deadly blow at capital, which, after all. is the lubrication which makes the commercial and political wheels revolve. Mr Beaucharrp suggests as a remedy that immediate steps be taken to reduce the duties chargeable under the I Act. Ho thought ten per cent might j safely be charged and meet with few '

objections considering the large

amount of money now available, and looking at the wonderful productivity of the country and the price our products are realising, we ought, he says, to be in a state of great commercial and industrial activity, instead of which we find a plethora of money held by the banks awaiting employment. Another thing Mr Beauchamp considers a hardship I at the present time is the application of the graduated land tax to people who own land, for trading or indufe trial prunoses. Originally it was contemplated by Parliament tha such a graduated tax would be operative only in the bursting up o: large estates, but no prevision waf made for the exclusion of lands situa ted within towns and boroughs heli for industrial purposes. This has al ready been put before the Premier, i but nothing has so far resulted. According to Mr Beauchamp there is scarcely any stock in a good industrial company which returns the investor more than five per cent per annum. j This, Mr Beauchamp contends, bears out his argument that there is not much capital available for investment in industries that may mean its locking up. In other words people are simply finding a temporary outlet for their resources elsewhere. In regard to labour legislation Mr Beauchamp favours a policy in the direction of moderation; Capital, he says, is entitled to ad much consideration as labour, and the two should, | as far as possible, go hand in hand.

****** It was Talleyrand who aaid of a certain act of Napoleon thfat "It was worse than a crime; it was a blunder." And there are blunders which are worse than crimes. Possibly Mr Harold Beauchamp thinks so by nuw. He, in /his official position as Chairman of Directors of th 9 Bank of New Zealand is persona grata amongst financiers. When the head of such an institute makes a statement concerning the effect that legislation is having on the financial position of this country, close attention and much respect are necessarily paid to what he says. We are fain to confess that when we saw Mr Beauchamp's declaration that the Death and Succession Duties in New Zealand were calculated to drive away capital; that, indeed, this effect had already been reached, we were pre pared to accept his ipse dixit. It 1 was within our knowledge, of course, that the same thing was being said "of the British Chancellor's plan; but surprise is hardly the word to express our feelings when we found that Mr Beauchamp had declared the new imposts of this country as something even worse than those of Mr Lloyd George. It was a relief, 1 theretore, when we discovered that Mr Beauchamp was all wrong. But why such a man, insuch a position, should deliyer himself of such condemnation without first of all making himself acquainted with the facts, is one of those things surpassing knowedge. In an interview,, the AttorneyGeneral has not only exploded Mr Beauchamp's statements, but h»s blown them into thin air. We may depend upon it, however, that these same statements of Mr Beauchamp have been published far and wide;tbat they have been cabled beyond our own shores, and are by this time being discussed on the other side of the world—to the detriment of New Zealand. Well may Sir Joseph Ward sigh, out, as he gazed upon the head of the Bank of New Zealand, "And thou, Brutus!" Dr. Findlay has come to the rescue, however, and the stab is shown .0 be only a low comedy one after all—made by one of those spring affairs used by the comic villain in burlesque! It now appears that estates, when left to widows, sons, and daughters are almost free of any further duty than that which previously existed, and that it is only when an estate assumes enormous proportions, or when the property is left oulside the family, that succession duties are heavy. It is to be hoped that Mr Beauchamp will see to it that the error he has fallen into is to some extent remedied at once by his making an explanation of his most unfortunate blunder.