The Bay of Plenty Times SATURDAY, FEBRUARY 6, 1943 ANOTHER WAR LOAN

Bay of Plenty Times, Volume LXXI, Issue 13065, 6 February 1943, Page 2

The Bay of Plenty Times SATURDAY, FEBRUARY 6, 1943 ANOTHER WAR LOAN

The Prime Minister, in his capacity of Actmg-M.imertei o Finance, last week announced the floating ot another Lbeity Loan sloX and at the same time invited advance subscriptions to the to As with previous loans short-dated and long-dated stock wil he ssued and although the rate of interest has not been disclosed tw be sure that Sie rates will not be any lower than those paid in respect of the last loan, that is, 2) per cent, on the shoit-dated, to k and 3 per cent, on the long-dated stock. There may not be a ush with advance subscriptions but whatever happens loan money must be found, for the war must be financed. Floating the last loan was not quite an easy matter and the authorities used every kind of publicity and propaganda to get m the money It W probable that the same course will have to be taken with the pending loan. If the loan is for £10,000,000, the money should be easily obtained for there are ample loose funds which could be.invested in Government stocks. According to their last return the Trading Banks held, at the end of December, over £70,000000 m demand deposits or current account balances. Of course all this money is not available for immediate investment, in fact the larger portion of it will be needed after the war to finance general business. We say that £10,000,000 could be easily raised, and if the authorities experience any trouble in floating the loan it will be because the people are becoming restive, believing that far too much of the war expenditure is wasteful. However, the money must be found and it is as well for the public to realise this now as later on. This will be a year of extraordinary expenditure, and therefore there will be a great expansion of credit throughout the world with an increasing difficulty of obtaining consumer goods. This will be due to the Allies taking the offensive in Europe. Hundreds ot thousands of men will have to be moved across the seas and millions of tons of war supplies must go with them. Furthermore there must be a further speed-up of war production to keep pace with the destruction of war material. According to the latest statement of the Chancellor of the Exchequer, Sir Kingsley Wood, Britain is now spending at the rate of £17,000,000 per day. This is a staggering amount, and yet the Allies are not flinching, although most know that the afterwards will be full of troubles for the world. When the war of 1914-18 started many predicted that it could not last more than two years for the nations could not stand the expense. The war ran on for four years. Such predictions are not being made in connection with the present war which is now nearly 3% years,old. The present war is infinitely more costly than the last/ We are paying for the war principally out of future savings. Heavy taxation will be continued for some years after the war ends,* and what could and should be saved in those years will be taken to pay for the war. This may have a sobering effect on the nations who will seek to promote trade with one another which is what the world needs. But for the expansion of international trade there must be a better distribution of the products of industry. If Governments do not interfere with private enterprise private enterprise will inevitably achieve that distribution.