LOANS FOR WAR

Waikato Times, Volume 127, Issue 21229, 27 September 1940, Page 8

LOANS FOR WAR

AMENDED REGULATION NOTICE OF COMPULSION CHECKING TAX STATEMENTS (By Telegraph.—Press Association) WELLINGTON, Thursday Regulations amending the Finance Emergency Regulations, 1940, issued in June, were published in tonight’s Gazette. One of the new regulations deals with fixed deposits payable in foreign currency and requires the owner of every such fixed deposit to furnish to the Minister of Finance, or as he directs, information and particulars thereof by October 15, 1940, or within 14 days after the date on which he becomes the owner of a fixed deposit, whichever date is the later. The Minister of Finance, the Hon. W. Nash, explained this evening that he had delegated his powers under this regulation to the Reserve Bank of New Zealand. Returns should accordingly be made to the Reserve Bank. The regulation was complementary to the existing regulations requiring holders of foreign securities and foreign currency to make returns of such foreign securities and currency to the Reserve Bank. War Loan Subscriptions Another of the new regulations amends the clause in the principal regulations which states that if the Minister of Finance has reason to believe any person has not subscribed in due proportion to his means to any war purposes loan, the Minister, by notice to such person, may require him to subscribe for any specified amount to such war purposes loan. The amending regulation states that notice may be given by publication in the Gazette to any specified person or two or more specified persons, or to all persons of a specified class (such Gazette notice being to and binding on all persons affected by it), and such notice may indicate the amount or respective amounts required by notice to be subscribed. Where in any such notice the amounts are indicated by reference to a person’s income or income-tax, the Reserve Bank, which acts as the Government’s agent in issuing the prospectus of any Government loans, and receives applications for subscribers thereto, will furnish the Commissioner of Taxes with statements of persons who have subscribed. The Tax Department will then check such statements with the amount of income or of income-tax payable by such person and indicate to the Minister to what extent any such person has failed to comply with the terms of the notice in the Gazette. Trustee Savings Banks Any certificate given by the Commissioner of Taxes as to the amount which any person is required pursuant to the basis set out in such Gazette notice to subscribe is to be conclusive evidence of such person’s compulsory liability to subscribe for such war loan.

Another of the amending regulations is designed to remove the difficulty confronting trustee savings banks who may wish to contribute to war loans. Under a proviso to section 33 of the Savings Banks Act, 1908, a savings bank is prohibited from investing more than 90 per cent of its total funds. During the last war this limitation was removed in so far as investments in war loans were concerned and the same course is now to be followed. Other amendments are purely machinery amendments* of the existing regulations. INTEREST-FREE PERIOD NOTED FINANCIER’S VIEWS (By Telegrapn.— special to Times) DUNEDIN, Thursday “ No one objects to compulsion if it is to catch the shirker,” said the Hon. W. Downie Stewart in an interview, “ more especially as we have applied conscription to the Army, but the real reason for the compulsion, probably arises from the fact that the loan is free of interest for three years and thereafter bears interest at 2i per cent. “We must assume,” said Mr Downie Stewart, “ that the Government has no desire to challenge or abolish the institution of interest on loans, as it still continues to pay interest to the Reserve Bank and on Post Office Savings Bank deposits, etc. In my view, it is wise to do so, for otherwise the bank will be robbed of one of its most useful functions. “ It think it would have been wiser to pay interest on a war loan throughout the term of the loan in order to encourage saving and to keep war bonds saleable in the market, for, if saving is discouraged, the Government may find as time goes on that there are no savings to borrow, yet borrowing from the public is the only safe form of borrowing the Government can pursue, for thereby its debt increases only at a pace equal to the demand for giltedged securities arising from current savings.”

CLASS SINGLED OUT STOCK EXCHANGE OPINION (By Telejrraph.—Press Association) WELLINGTON, Thursday “There is no misnomer in the i term compulsory as applied to the loan announced today,” said Mr Andrew Hamilton, president of the Stock Exchange Association of New Zealand. “A particular class of taxpayer has again been singled out and is compelled to make application. Admittedly he may apply voluntarily for more, but he is under 1 compulsion for a certain amount, if there is any practical meaning to the Statements in the prospectus. “Compulsory subscription has been based on income tax for the year ended March 31, 1939. a year when many traders and business concerns would shew profits they have not been able to make since the war began and since further import restric- ; lions have increasingly reduced their I earning capacity. I “Another question being asked by i many is what provision has been made for cases of hardship. And, finally, what is the position of soldiers overseas whose incomes before i they left the country were such as to bring them within the terms oX the

prospectus? Are they obliged to contribute to this loan as well as offer their lives?” THOSE TO CONTRIBUTE TAXABLE INCOME OVER £3BO According to the war loan prospectus, the minimum subscription expected from individuals is an amount equal to the fncome tax paid for the year ended March 31, 1939, i.e., the amount of tax paid this year, decreased by £SO. Thus the loan will affect only those who had a taxable income of more than £3BO for the year prescribed. Complete figures for the year ended March 31. 1939. are not yet available. Returns for the year 193738, show that of a total of 195.578 taxpayers, 105.953 had an assessable income of less than £3OO, while 43,301 fell between £3OO and £399. Of a total of 6582 companies, the assessi able income was less than £IOOO in 4436 cases, representing 67.4 per cent oX the total uumb«.