POINTS FOR CONSIDERATION

Evening Post, Volume XCII, Issue 40, 16 August 1916, Page 7

POINTS FOR CONSIDERATION

A COMMERCIAL ' MAN'S FRIEND

LV SUGGESTIONS.

"The magnitude of the War Loan and the necessity for its subscription in full are the reasons that prompt me to make one or two suggestions to the Minister for Finance with respect to its terms," was the introductory remark made to a Post representative by a gentleman intimately associated with finance in New Zealand, in reference to the War Loan. ".I do so in a spirit of quite friendly criticism, being desirous of seeing the issue a complete success," he added. "It is the biggest thing of the kind New Zealand has yet attempted, and it would be lamentable if it failed.

"In the first place, the time between the receipt ami closing of applications for bonds is too short. The closing date is 21st August, and the prospectus was published only on Friday last, 11th of August. It should have been borne in mind, when fixing the1 closing date, that those who intended talcing up the bonds would necessarily have to make arrangements that might take some little time. One cannot do these things in a hurry. Perhaps the Minister knew quite well how much he could rely on getting; therefore the time between the publication of the prospectus and the closing of applications—2lst August—was quite sufficient. However, I notice that provision is made to extend the period, and, as I see it, I think this should be done.

"Now, the Minister is empowered to forfeit any deposits and instalments that have been made by applicants who may .find themselves unable to meet subsequent instalments at due date. I think this is a most unwise provision, and not unlikely to prove_a deterrent to some prospective applicants. A prudent man will pause, I should say, before committing himself to take up any considerable amount of the loan when he understands what that means. Who can say—any one of vs —what may be thj? position on, say, Ist December next or Ist February, 1917 ? Supposing that an, applicant found himself unable at either of those dates to promptly meet his instalments, would it be right for 'him to sacrifice the 25 per cent, he paid on application and the 25 per cent, on 2nd October? Yet, as I see it, 50 per cent, of the amount applied for is liable to be forfeited. I. do not like that clause at all, I do' not like that word ' forfeiture.' It is possible that some prospective investors may bo repelled by that clause.

"Interest is payable on the bonds on Ist March, 1917. Very well. But people who are earning interest oil their money already will have to sacrifice it if they divert it into the Wai- Loan. _ They should be given the opportunity, if they wish to exercise it, of paying cash for the stock, and so avoid the loss of interest that payment by instalments will involve if they have t.o : break their deposits—now earning interest—to invest in this loan.

"In order to ensure the success of this loan —it is a very big loan, considering the investing capacity of our population —the Minister should remember that its terms should be made most attractive, for investors, however patriotic they may be, are not unmindful of the fact that there are other Government stocks in the market giving "as good a return as and of equal security with this £8,000,----000 War Loan.

"Then, except for the joy of receiving money in both hands at once, I cannot see why the Minister declines to accept the stock or bonds of this £8.000,000 loan at par in payment of death and succession duties. Why not? The transaction would certainly deprive the consolidated revenue of the amount of duty thus paid, but then it would reduce the. national debt to that extent, and l>esides effect a saving of the interest duo on the bonds so accepted and redeemed. The Commonwealth Government in all its three loans has made provision for the acceptance of these stocks and bonds in payment of the duties referred to; and quite right, too."