The Auckland Star WITH WHICH ARE INCORPORATED The Evening News, Morning News, The Echo and The Sun. TUESDAY, SEPTEMBER 6, 1938. INVESTORS' DOUBTS.

Auckland Star, Volume LXIX, Issue 210, 6 September 1938, Page 6

The Auckland Star WITH WHICH ARE INCORPORATED The Evening News, Morning News, The Echo and The Sun.

TUESDAY, SEPTEMBER 6, 1938. INVESTORS' DOUBTS.

For the cause that lack* aeaietanoe. For the wrong that needs reaistanoe, For the future in the distance, And the good that we can do.

The control now being exercised by the trading banks over the export of capital is a protective measure designed to conserve the banks' overseas funds, which have fallen considerably in the last two and a half years. It is a regulatory control, not amounting to a prohibition. The Minister of Finance has with a show of indignation denied that the Government has imposed restrictions. So far as we know, no one has suggested that the Government has done so. Nevertheless, the restrictions are operative, and Mr. Nash has not denied it. Instead of speaking of " rumours circulated maliciously " and of " the lack of patriotism of some of the Dominion's citizens," Mr. Nash might well give rime to considering why at this time New Zealanders should desire to invest their money overseas in such quantities that restriction has been deemed necessary. It is pointless to denounce such investment as " unpatriotic." The motive of overseas investments is the same as the motive of investments in New Zealand—security plus dividend return— and the fact that some investors see more bt>pe of both abroad is directly due to the policy and actions of the Government.

The latest action, Mr. Nash's amendment to the Social Security Bill, in effect singles out the company shareholder to bear a special tax in addition to the taxes he pays as a citizen. The more the Government takes of the earnings of any company the less there will be for the shareholder, and so company investment in New Zealand becomes the less attractive. The Government's reply to this would be to say that the balance-sheets and dividend payments of companies over the last two years show that they have not been hindered, bnt helped, by Government policy. Such comment is persuasive only amongst the unthinking. Company fluctuate from year to year, bnt imposts such as the social security tax remain. The total of taxes represents a burden which in times of falling profits will become the sooner unsupportable because in good yean it has made the accumulation of reserves more difficult. It is appreciation of these facts which leads some people to the conclusion that their capital can be made to serve them better overseas. The remedy is for the Government to show, by its actions, that there is a future for investment in New Zealand.