The Waikato Times. FRIDAY, OCTOBER 11, 1940. NATIONAL SAVINGS SCHEMES

Waikato Times, Volume 127, Issue 29241, 11 October 1940, Page 4

The Waikato Times. FRIDAY, OCTOBER 11, 1940. NATIONAL SAVINGS SCHEMES

Announcing the national savings schemes, the Minister of Finance faced a much more congenial task than some that have fallen to his lot in the course of the war finance programme. It is rather remarkable that savings investment was not one of the first methods put into operation. There are very sound reasons why it should have been offered before the Government resorted to a compulsory loan. With provision made against the accumulation of excess profits, the logical course to adopt was to offer an avenue for the investment of saving through which all could contribute. The Government contends that it owed a duty on its pledge to conscript wealth as well as manpower, but there is nothing more definite than that wealth has long since been conscripted by taxation and other levies. The savings schemes, in the present circumstances, are certainly attractive to investors, and it will be surprising if there is not a ready response. Interest at 3 per cent, is by no means ungenerous—perhaps rather more generous than was generally expected. Those who are compelled to contribute to the compulsory loan, without interest for three years and then bearing interest at only 2£ per cent., might well look with envy on those who have the privilege of offering their savings without compulsion for a very satisfactory return. At such a time, those who have a little surplus cash in hand will no doubt be quick to make that cash available to the Government. Considerable sums of money are awaiting investment in the Dominion. The large sums deposited in the banks, mostly in small individual amounts, do not represent the total sum seeking investment. It will be noted that in the case of its savings bonds the Government is making sure of the Social Security and National Security charges in advance. Hence the purchase price of the bonds is 17s 6d for £l, £8 15s for £lO and £B7 10s for £IOO. And of course the appropriate amount of interest on the bonds and investments must be included in income tax returns. Moreover, interest will not be payable in cash but will be compounded and accumulated until the bonds mature, and will then be paid as part of the redemption value of the bonds. Although generally savings investments might not be withdrawn before the due date, there is a provision against unexpected hardship by which the Minister may exercise discretion and authorise repayment. Savings investments may be employed at any time for the purchase of national savings bonds, and being payable to bearer and transferable by delivery, the bonds should be readily saleable should the investor desire to realise on his security. Altogether the terms appear to be singularly attractive by comparison with the conditions of the compulsory loan. Nevertheless the savings schemes are worthy of every possible encouragement, and if expectations are realised they should go a long way towards solving the immediate and future problems of finding the money to finance the war programme. Whether any limit to the total investment will be necessary or advisable in view of the Government’s intention to pay the costs of war as far as possible from revenue remains to be seen. There is no immediate need for a decision in that direction, for the Government will certainly require a large sum of loan money.