The Bay of Plenty Times THURSDAY. OCTOBER 15. 1942 SECOND LIBERTY LOAN FOR £10.000.000

Bay of Plenty Times, Volume LXXI, Issue 13772, 15 October 1942, Page 4

The Bay of Plenty Times THURSDAY. OCTOBER 15. 1942 SECOND LIBERTY LOAN FOR £10.000.000

The prospectus of the second Liberty Loan was issued on Monday, and investors in gilt-edged securities who are satisfied io invest in long-term stock yielding 3 per cent, less taxation have another opportunity of satisfying their requirements. t mug i this is called the second Liberty Loan, it is. in actual fact the time war loan. For the first loan ,it will be remembered subscriptions were made compulsory on the part of all income-taxpav ei s. v\ i° were obliged to subscribe an amount equal to the amount of incometax paid, less a small concession. This meant practically the payment of a double income tax during the year. This was extremes hard on many companies who were obliged to sell the stock at a heavy discount, for they needed the money in business. Moreover, the loan was made free of interest for three years. It is next v eai that those who were compelled to subscribe to this loan will receive interest. The first Liberty Loan carried an interest and the present loan is also interest bearing. This second Liberty Loan, like the* first, is issued at par, that is, £IOO has to be paid for £IOO worth of stock. The loan is issued in two parts, short-term and long-term stock. The short-term stock matures on May 15, 1948, currency being therefore five and a half years. Th.e long-term stock has a currency of 104 years to 134 years. The dates of maturity are stated at 1953-56. This means that after 1953 the Government may redeem the stock on giving three months’ notice, and if this right is-not exercised the loan must be repaid on May 15, 1956. Subscriptions to the loan will be received up to November 15, so that investors have five weeks to make up their minds as to whether or not they will subscribe, and the amount they are willing to invest. As some may wish to pay for the loan in instalments, facilities are provided. Such subscribers must pay 30 per cent, on application, 30 per cent, on December 15, and 40 per cent, on January 17, 1943. The short-term stock carries 24 per cent, interest, and the long-dated stock 3 per cent. Investors may subscribe for an amount as low as £lO. To boost the loan, military parades are to be held. The Commonwealth Government adopted this course in connection with its last loan, and a substantial number of men, including American troops, marched through the main streets of Sydney. This is regarded as a practical method of bringing the loan before the public and stimulating patriotism. AVe venture to hope that subscriptions to this second Liberty Loan will pour in and that it will be over-subscribed. AA e must pay for the war and for victory. There is increasing evidence that money will be in.very strong demand, and this demand is bound to harden money rates. Money, like water, will seek its own level. If money rates advance in Europe, as seems inevitable, credit will flow in that direction, and low interest rate securities would be sold even at a big loss to invest the proceeds in other directions. The means of payment and the monetary situation is sure to cause some anxiety in the post-war period.