The Press WEDNESDAY, MAY 16, 1945. The Victory Loan

Press, Volume LXXXI, Issue 24567, 16 May 1945, Page 6

The Press WEDNESDAY, MAY 16, 1945. The Victory Loan

The Minister of Finance has set the people of New Zealand an easier task this year than last in the Victory Loan campaign. More than that, when the loan was officially opened on Monday, more than £10,000,000 of the £25,000,000 required had already been subscribed. But since this means, primarily, that many (perhaps most) of the very large investments, such as those of the Government departments, national institutions, and so on, have been made early, it means also that the responsibility for completing the loan swings to the smaller investors. If they rightly estimate their part in the war that has been won and in the war yet to be won, they will gladly make themselves responsible. Gratitude will work upon them, and should do so. The victory in Europe is theirs, in part of their own making but in far greater measure given to them by the service and sacrifice of others. If they lend thankfully, they will have a good reason. Many will think of the unfinished battles of the Far East, where victory is advanced a long stride by the overthrow of Germany; and if they lend with a strengthened impulse to speed and aid every effort towards that victory, they will be well moved. But to recognise motives such as these and respond to them it is not necessary to ignore another. All that gratitude and resolve are ready to do is urged, also, by the facts of war finance—and the prudence that takes them into account lengthens the patriot’s view of his duty. Those facts ar(s in brief, that the Government’s plans for the conduct of the war are laid and its commitments made. The necessary, maximum effort will be called for; aqd the financial cost will be met. There is no choice about this. The Government’s will and the country’s will are at one in the matter. The only choice is, how the cost will be met; and if the country declines the Government’s proposal that taxation and loans shall square the accounts, then only credit creation remains to do it. But credit creation is still a device, though the only one left, by which the Government makes the country pay. It makes the country pay by diluting the value of every pound earned in wages or profit, every pound saved and invested, every pound received in pensions or interest; and the extent of the dilution, or loss, is the extent of what is taken to square .the accounts. This way is the last and the worst. It takes blindly, from those who have nothing to spare as well ns from those who have selfishly ■ spared themselves everything possible. It overthrows all' stability in values; it destroys the basis of contracts such as the Government has made with the lender in all war loans and savings transactions. The capital returned will be diluted capital; the Interest paid will be diluted interest. Finally, as it dislocates the economic, structure and creates social injustice and grievance, this method roust sooner or later begin to impair the war effort and jeopardise the prospects of peaceful reconstruction. Every sane man and woman will reject it, and lend. -1