WAR FINANCE.

Auckland Star, Volume LXXI, Issue 237, 5 October 1940, Page 7

WAR FINANCE.

"WE WILL BE FAIR."

MONEY CONSCRIPTION.

STATEMENT BY MR. NASH.

WELLINGTON, this day.

The emphatic statement that the Government intended to use the power that it has to provide for the defence of New Zealand and for the Dominion's part in the defence of Britain, was made 1 by the Minister of Finance, Mr. Nash, in 1 the House of Representatives yesterday when replying to the debate on war finance. "We are not going to argue with anyone," he declared, " but we will he fair. If some one has control of goods expressed in money and tliey are needed to defend the people, we are not going to argue. We have to defend this country, and the only way is to take the goods that we produce and use those •goods." _ . -

Replying to specific points raised iii| the discussion, Mr. Nasli referred to the Opposition statement, that the bonds would be worth £65 as unadulterated humbug. On to-day's market on the basis of 3J per cent they would be worth £82. He said that interest rates to-day were lower than ait any time before the Government came into office. " Our securities to-day are showing a leifls return for flOCh-rwhich means that they are more valuable—than at any • period before' we ; were put in charge of the country,!* contended the Minister. 'Mr. Poison {National, Stratford): ghat is overseas. ,-w-r

Mr. Nash: No, in New Zealand. They are quoted at £3 8/8, and no previous Government was able to' raise loans at less than that figure. Stock Prices Quoted. The Minister quoted the price of New Zealand five per cent stock, 1956-58, abroad as £107 12/6 on September 26. Comparable Australian stock at the same time was listed at £102 15/. "Is there something wrong with the. prestige of Government securities?" he asked.

Mr. Nash said that there would be a little more than 18,000 people liable under the war loan, 15,000 of them individuals and 3000 companies. This was only part of the Government's policy of conscripting wealth.

Sir Alfred Hansom (National, Pahiatua)Are you going to take credit as well as wealth.?.

Mr. Nash: We will take everything. This country's effort will be measured by the willingness or everyone, to sacrifice, and a greater sacrifice in the fullest sense of the term on the part of those who have mora than those who have less. ,

He quoted figures to show that a single man * with an income of £600 would he liable for £10 and the man with £700 for £20. Was that hardship? On the £2000 maximum the liability was £310. A single man with an unearned income of £2000 maximum would have to subscribe £430. There would be difficulties for those who were liable for 10/ to 15/ in the £ income tax. There would be £80 out of the £100 still there, and that would become more as the years went by- ;

There was no compulsion in the pro-, posal in . the. first sense, said Mr. Nash, j People had the opportunity of putting in their applications voluntarily and willingly up to a specified date, and he believed there would be a big percentage of the people who would be anxious to subscribe, but there would be some who would never wAscribe voluntarily, and the measure was for them. wiiy Wo Interest? j Dealing with the question of why:no interest was to be paid during the war period, which had been estimated at three years, Mr. Nash said that interest transferred the right to use certain goods without pri(». The Government

said it had the right to use all the goods it required for the war for three years without paying anything for the right to use the goods. After that the Government paid £2 10/ every year for every £100 worth of goods the Govern- 1 ment used, but at the end of the period the Government gave back the goods to the person who had the title for the. goods. Taxation made available to the State a certain proportion of everybody's goods witnout recourse to getting them back, and loans made a further proportion of a person's goods availahle. Free of interest proposals provided that those who had control of wealth should relinquish that control for the time being free of charge to the State, so that the other man who was fighting for the existence of the State and the protection of the others could have those goods to enable him to live and to fight. " Complete Treason." It was complete treason to say that the difficulty would be overcome, continued Mr. Nash, by printing a lot of : money and issuing it without recourse i to the ordinary people for them to buy goods with.

Mr. Poison: That is one thing- we are agreed upon.

' If he wanted to destroy the economy of any country, said Mr. Nash, he would destroy its currency. He knew what inflation meant. It was not control in the ordinary sense of currency and credit. It was un-control. The Government was pledged to the limit to control sredit and currency, to try to find a way to the limit of using the power that ivas in credit control, but to issue, money vithout. any goods being there was a :rime against the State and meant a lefinite deterioration of every, individual n i.t.

Mr. Goosman (National, Waikato) We say " Hear, hear." ...

Mr. Naeh: That doesn't make it right. (Laughter).

i Continuing, Mr. Nash said he thought it should be said that some of the test people in this country were being deceived by the type of propaganda to which he had referred, and it was being put over with no belief behind it.

j Mr. Hash paid tribute to the people who had contributed loans voluntarily. They were the cream of the country in | many cases, he said.—(Parliamentary Reporter). , ,