A LOCAL LOAN

Dominion, Volume 8, Issue 2552, 28 August 1915, Page 3

A LOCAL LOAN

TO BE FLOATED AT ONCE PROSPECTS DISCUSSED The Public Accounts Committee recommended that the New Zealand Loans Bill, which had been read a second time pro forma, should be allowed to proceed. Urgency was claimed for the measure. On the motion that the Bill should bo committed, SIR JOSEPH WARD (Minister <jf Finance). said that the Bill .provided for giving effect to the.: proposal contained in the Financial Statement for tho borrowing of £2,000,000, and the necessary detailed machinery to : enable that loan to_ bo put upon l the local market, as provided for in the Bill. Clause 3 provided for the currency ,of the debentures to be determined by the Minister of Finance, with a maximum of 25 years. The debentures would bo for sums of £5, or a multiple-thereof, but not exceeding in one case the sum of £1000. Clause 4 enabled the holder to change existing debentures for debentures under ; the Bill.' Clause 6 provided that the income derived from the debentures should be free* from income tax. The reason for urgency was that he desired authority to enable him, as soon as possible, to put the loan upon the market. Mr. JM'COMBS (Lyttelton) thought that time should be given to discuss th(i Bill. , . i , ; Mr. T. M. . WILFORD (Hutt) said that. if the National: Government thought that the Bill should go through at once he was prepared to give them urgency at such a time. Mr.. J. ANSTEY _(Waitaki) desired to know if the raising" of the : loan locally would have any effect oil the loans for local work? Mr: H. J. H. OKEY (Taranaki) said that the amount of. money that could be raised locally was limited, and in a young country .such money was desired for local improvements. He asked the Minister of Finance, if any-portion of the money was to he raised outside the Dominion? . . 1 J7 Mr. W. H. FIELD. (Otaki) said that they should not disturb local finances. Many thought that rather ' than the Government should mop up the money that was tied up, it should be unlocked for. private: purposes.':;; He .understood that some money had' gone out of the Dominion for .Imperial loans. This was not desirable, 'for all we could lend the Imperial Government would be but a drop in the bucket, and such monoy would be better employed in local industrial work. ■Mr. G. WITTY (Riccarton) thought that it was a good thing that we should try and help ourselves, but with the rate of ; interest at 4} per cent, he did not think the Government would get much. ' . Mr. Massey : You wait and see about that. ,-Mr. Witty said that Great Britain had always helped us, and we should not .quibble, if .some of our people wanted to take, up Imperial loans. Mr. A.: HARRIS (Waifcemata) congratulated the Government on the measure, and .said that he would like to seo people take up small amounts, such as £1. ' They; could be" given coupons till they had'invested enough to got a £5 debenture. ... SIR: JOSEPH WARD (Minister of Finance) said that every aspect of the Bill had been very carefully considered. When honourable members realised that wb were getting £400,000 per month from England ; for war .purposes thoy would understand thajfc we could not go on the London market for everything. Members, would see that under abnormal conditions,such a course could not be adopted. He did not agree that money; through' private channels would be interfered with, but the primary thing to consider was that every penny for war purposes was coming from outside New Zealand. That was the reason why a £2,000,000 loan was to he put on the local market. If - members locked at the large increases in deposits in the Savings Bank, and banks of this country, they would realise that the reason for,{the plethora of money was the high prices we were receiving for our products. As a matter.of fact there were several millions waiting for investment in this country. He thought that they would get the money at 4£ per cent, free of income tax, and that money would not go out of the,country.' Much jof it. would.be spent, in wages., [t was our duty to keep off-the English market. He had .not the slightest loubt that people, would subscribe for i'he loan, recognising the circumstances md recognising that it was for public ivorks. Ho had already laid it down that. they • would make provision for those wishing to invest smaller, sum's than £5. They could do :so through the Post Office. He knew_ already of !arge sums which would be proposed 'or investment in this loan, and which lad been'agreed to already. In normal, times that money would not be availlble for Government loans. The motion was' agreed to. ' In Committee, Sir. Joseph Ward, in answer to Mr. } Forbes, said that it was; not intended to float another loan at a higher •ate of interest. Ho had overy reason 1 ;o believe that the money could be secured in this country at 4$ per cent., . uid lie did not desire to induce an . ipward' tendency in the money market; in the contrary, it was hoped to steady he money market. . _ In answer to another question he ; laid that he believed the loan would ' io.oversubscribed. 1 The-Bill was reported without amendueut, read a third time, and passed. ■'