STOCK EXCHANGE VIEW

Press, Volume LXXXVI, Issue 26125, 30 May 1950, Page 6

STOCK EXCHANGE VIEW

PUBLIC SUPPORT URGED

(New Zealand Press Association)

WELLINGTON. May 29. It was apparent that the Government was pursuing its course of realistic and orthodox finance, which would help to put the finances of the' country once more on a sure footing, said the chairman of the Wellington Stock Exchange (Mr P. W. Blundell), commenting last night on the Government’s announcement of its new national development loan of £20,000,000 and of the abolition of the 33 1-3 per cent, super-tax on unearned income.

For r the last few years, the Stock Exchange, in common with other similar bodies, had protested in vain against the retention of the super-tax on so-called unearned income, said Mr Blundell. It was only right that the people should lend a portion of their savings for the development of the country, but it was manifestly unfair and economically unsound that they should then have to suffer such additional tax imposition. For the last year or so it had been apparent that no Government could hope to raise any large loan at the previous “tap issue” terms of 3 per cent, for 17 years, Mr Blundell continued. The Government had met the position by reducing the term to 11 years, and issuing the loan at a slight discount. The effect was to produce a yield of £3 Is per cent, for an investor who held until the final maturity, and that rate was fully competitive with the yields us:.ally obtainable from similar existing loans. Provision for the spread of payments would also assist those who were unable to invest fully before die loan closed next month.

“Under the existing conditions there can be no -doubt that all reasonable expenditure on national development should be paid for by the raising of loans and not by the creation of new paper money,” said Mr Blundell. The Government’s attempt to do this on the reasonable terms it offers should meet with unqualified approval, and me public are strongly urged to give the loan their* immediate and fullest support.”