RUSHED BY INVESTORS.

Auckland Star, Volume LXV, Issue 142, 18 June 1934, Page 4

RUSHED BY INVESTORS.

BIG COMMONWEALTH LOAN. It is not altogether a healthy sign (says the Melbourne "Argus") when a low interest Commonwealth loan like the £12,000,000 loan just floated is rushed by investors. As a testimonial to the high standing of the Commonwealth as a borrower it is particularly gratifying, but, taken in conjunction with low interest rates ruling generally, it is an indication of the unattractiveness of other forms of investments, particularly industrial enterprises. The comparative freedom from taxation of interest on Commonwealth loans is undoubtedly a powerful influence on the success of Government flotations. Many investors find this advantage the determining factor in their consideration of gilt-edged securities, as compared with industrial concerns showing a much higher rate of interest, but subject to taxation. Substantial reductions of taxation would undoubtedly cause much idle or low interest bearing money to be diverted into reproductive channels. This would mean genuine progress along constructive lines, leading the way out of the depression. Government borrowings are only a temporary expedient to relieve a necessitous condition, the only permanency being the debt and the additional interest burden on the general community.