WAR FINANCE

Wairarapa Times-Age, 26 September 1940, Page 7

WAR FINANCE

THE COMPULSORY LOAN FINANCE MINISTER GIVES PARTICULARS. AT LEAST £8,000.000 TO BE RAISED. ißy Telegraph—Press Association) WELLINGTON, This Day. Arrangements have been completed lor the issue of a war loan in New Zealand and prospectuses will be available throughout the Dominion by the end of I his Aveek. This announcement was made last night by the Minister of Finance, Mr Nash, who said that file issue was estimated to provide a minimum of £8,000,000. Those who have already contributed froe-of-interest loans will have the option of converting them to this issue, and those who have made donations to the War Expenses Account may reduce their contributions to the loan accordingly. Individuals and companies will be expected to subscribe at least to the extent of their income tax payable last February, decreased in the case of individuals by £5O and in the case of companies by £7O.

"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 Mi’ Nash. "Of the amount required to be raised in New Zealand, special taxation is estimated to provide £14.000,000, leaving approximately £5,000,000 to be raised by loan. EXPENDITURE ABROAD. I "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 interest loans will have the option of converting the same into this issue. Persons who have made gifts to the War Expenses Account may reduce their contributions to the loan accordingly. "The prospectus provides for the issue of Government stock which will be non-interest bearing to October 1, 1943, and will thereafter till October 1, 1953, when the principal is repayable, bear interest at 21 per cent per annum. The first interest payment of £1 5s per cent will be made on April 1, 1944, and thereafter payments will be made halfyearly. Any stock issued to an applicant in terms of the prospectus, will be accepted at par at any time before maturity in payment of death duties in respect of the applicant’s estate. The price of issue is £lOO per cent and is payable as follows: — On application £3O per cent On December 16, 1940 .... £4O per cent On March 25, 1941 £3O per cent "The loan is being raised in accordance with the provisions of the New Zealand Loans Act, 1932, whereby interest and principal are a direct charge on the public revenues of the Dominion. Applications for issue of the stock will be received by the Reserve Bank of New Zealand up to October 18 when the loan will close.” OBLIGATION DEFINED. The Minister of Finance has indicated that for the purposes of the Finance Emergency Regulations, 1940 (No. 2) he will not regard any person as having subscribed in due proportion to his means unless such person has subscribed to this loan at least the amount of the income tax payable by him in respect of income derived during the year ended March 31, 1939, being the tax normally payable in February, 1940, decreased in the case of individuals by £5O and in the case of companies by £7O. For the purposes of computing this minimum subscription, which must be calculated to the nearest multiple of £lO. any income that was free income tax in the hands of’ the recipient shall be deemed to have been subject to such taxation. The 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 farmingincome where the land used had an unimproved value of less than £3OOO. TRUSTEES TO CONTRIBUTE. "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 obligation 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 those regulations.” said the Minister. "Copies of the prospectus and forms of cash application will be available within a day or two at the Reserve Bank, Wellington, district Treasury offices in Auckland Christchurch, and Dunedin, at any postal money-order offices or from members of any stock exchange in the Dominion, but neither the banks nor the stockbrokers will receive any commission for their services in connection with this particular loan.” In commenting on the issue, Mr Nash stated that while all are expected to contribute a minimum in accord with their means, the prospectus is a general invitation to everyone to assist in the war efforts by subscribing as much as possible. “I hope.” he said, “that there will be a generous response to the' invitation to subscribe to the loan, the proceeds of which will be used solely for equipping and maintaining our armed forces in the Dominion or ! overseas and other war purposes.”