DEVELOPMENT LOAN

Press, Volume LXXXIX, Issue 27075, 25 June 1953, Page 10

DEVELOPMENT LOAN

MR BOWDEN APPEALS FOIL SUPPORT RECENT SUBSCRIPTIONS LESS THAN EXPECTED (New Zealand Press Association) WELLINGTON, June 24. Though the Government needs more than £20,000,000 to undertake all priority works, it set this target figure for its national development loan because of the state of the financial market. But it hopes the loan will be greatly oversubscribed to allow additional work to be carried out. The Associate Minister of Finance (Mr C. M. Bowden), giving this information in a radio broadcast tonight, said that if the loan moneys fell short of ’ requirements for certain urgent works, the Government would use taxation receipts to meet them. Reporting on the progress of the loan, Mr Bowden said that the rate of subscription would have to be increased to £1,000,000 each working day if the loan were to be filled by the closing date next Tuesday. He appealed for support from both the large and small investor. Returns for this week had been at the rate of about £400,000 a day, bringing the total subscriptions to £16,000,000. The last few days had not produced the returns hoped for, he added. More than £6,000,000 of the £10,000.000 outstanding in the 1940 war loan, which would mature in October, had been converted, Mr Bowden said. He regarded that response as a sign of confidence in the Government, but he appealed to those holding the remaining £4,000,000 to subscribe. “To avoid having to pay out is just as important as receiving new subscriptions,” he said. He also reminded listeners that national savings falling due on June 30 could be invested. Post Office savings could now be transferred to the national development loan, Mr Bowden said. Provisions for u this were similar to those already made for national savings. Withdrawals from the Post Office Savings Bank would be made on July 1, so that interest would be paid at post office rates for June, and at the loan interest rate of 33 per cent thereafter, he said. System of Priorities To decide the amount of the loan, the Government first drew up a programme of all desirable works—works urgently needed for the progress of the-country, said Mr Bowden. “This programme involved a sum of money which could not be raised by any other method of sound finance, so that a strict system of priorities had to be arranged,” he said. “Even on this basis, to undertake all priority works more than £20.000,000 would be wanted. On the other hand, the condition of the financial market had to be taken into account. “The sum of £20.000,000 was fixed as being within the market resources, though less than the amount needed for all necessary works,” he said. “For this reason it is hoped that the loan will be greatly oversubscribed, so that additional works may be carried out.”

Mr Bowden said that the Government agreed in principle that capital works should be provided from loan moneys as far as possible. “But if loan moneys fall short of requirements for works such as schools and housing, we are bound as a responsible Government to see that the requisite moneys are provided from taxation,” he added, “and sooner than have these urgent works abandoned, taxation receipts will be used.” Now was the time for subscribers, large or small, to come forward if the object of £1,006.000 a day for the next four working days was to be achieved, said Mr Bowden. Loan money meant that the country’s investors were providing for the country’s progress. £504,250 SUBSCRIBED IN CHRISTCHURCH Christchurch subscriptions to the National Development Loan have reached the £500.000 mark. Up to yesterday a total of £504,250 involving 433 applications had been subscribed. Largest individual subscriptions are two of £25.000. one of £20,000. and two of £lO,OOO. The subscriptions do not go below £5O. The loan closes on Tuesday next. According to local Treasury officials many people seem unaware that subscriptions as low as £lO are in order