Wairarapa Times-Age TUESDAY, OCTOBER 13, 1942. FINANCIAL TEAM WORK.

Wairarapa Times-Age, 13 October 1942, Page 2

Wairarapa Times-Age TUESDAY, OCTOBER 13, 1942. FINANCIAL TEAM WORK.

QN its merits and as a very necessary contribution to the national war effort, the second Liberty Loan’ which opened yesterday, should attract a ready and adequate flow of both large and small investments. These last are particularly important, not only because it is incumbent mn all who are able to do so to assist their country financially, as well as in other ways, in the present time of emergency and danger, but for the reason that the Joan will only serve its intended purpose in a fully effective way if it represents a mobilisation of the savings of at least a substantial part of the community.

The sum to be raised by November 14 is £10,000,000, completing an amount of £27,500,000 which is being borrowed internally during the current financial year towards the war outlay of the Dominion. A chance is thus offered to all who have money at disposal, not least to those who can make it available by a measure of saving and sacrifice, to put it into fighting service. It is, of course, just as necessary that funds should be provided to meet military expenses of every kind as that men and women qualified to do so should personally face the hazards and hardships of war service. The most that is asked of investors in the Liberty Loan, however, is a temporary sacrifice, ■which will not only help their country to win the ■war, but will work out to their own eventual benefit.

From the standpoint of the community and from that of individual investors, indeed, the raising of the Liberty Loan should be regarded less as involving sacrifices than as a helpful and advantageous measure of economic organisation and adjustments. In the conditions brought about by the concentration of national energies, in this country and others, on war service and war production, a great increase in, the amount of available money and credit is accompanied by a heavy reduction in the volume of those goods and services on which much of the income of the community normally is spent. If this state of affairs were allowed to stand unmodified the purchasing power of money would wither away progressively.

Besides being indispensable in order that the war may be fought, the high war taxation we are paying operates with definitely beneficial effect on our internal national economy and on the earning and spending of the individual citizen.. It has the effect at least of checking the sky-rocketing of prices' and of setting limits to inflation. The raising of a war loan serves the same good purpose, but with the important difference and advantage from the investor’s standpoint that money which can be spared, instead of being transferred permanently to the State, is put into a good interest-bearing investment, from which it will be recovered at a time when it can be spent much more advantageously than it could be at present.

The potential small investor who considers the facts will have no difficulty in deciding for himself that it is to his personal advantage to put into safe storage money for which he will certainly be able to obtain better value later on than he can hope to obtain now. It is beyond question too that the more a loan of the kind opening today is subscribed by small investors the better will it assist to steady and regulate prices and economic conditions generally. Very large subscriptions to a national loan are apt to amount, in greater or less degree, to the creation of new credit and therefore to an extension and enlargement of the factors making for inflation. On the other hand, small or comparatively small subscriptions involve, as a rule, the actual suspension for the time being of a corresponding amount of individual purchasing power and so help to check and limit inflation. An appreciation of their patriotic duty and a wise regard for their own interests should equally impel those who are in a position to make small subscriptions to the Liberty Loan to do so.