LOANS FOR WAR

Evening Post, Volume CXXX, Issue 3, 3 July 1940, Page 10

LOANS FOR WAR

NEEDS OF INDUSTRY

THEIR HIGH IMPORTANCE

"Evening Post," July 3. ♦

Authority to raise and spend £20,000,000 for war purposes generally was'given to the Commonwealth Government by a Loan Bill which was passed by the House of Representatives last week. The Treasurer (Mr. P. C. Spender) said it would not be necessary "for some time" to borrow this money as ample loan funds were at present available. During May Parliament appropriated £68,394,000 to cover commitments for war services up to December 31 next, but, in view of recent developments, further financial authority was now sought One of the main purposes to which the £20,000,000 would be devoted was munitions.

Sir Earle Page said he hoped that money raised for war purposes would be spent as quickly as it was raised. Large balances should not be permitted to accumulate in the Federal Treasury, or employment would be affected by a break in the flow of money. Mr. Spender: We are watching that. The war may go on but production and industry must go on too, so closely are they related to the prosecution of the war. Banks in Australia and New Zealand will be called upon to provide accommodation to primary producers and will require to have sufficient funds at their disposal for that purpose. A Sydney commercial writer directed special attention to this need and remarked: "While war needs must take precedence so far as available funds are concerned, care should be taken that as little as possible of the funds of the country should remain unemployed. The country is now entering the season of the year when normally calls are made on bankers by rural interests for finance prior to receipts from the wool clip, and though the credit position is extremely liquid at present the return of funds to the banking' system through the Government spending what cash it has Withdrawn from the people by taxation and loan should not be delayed." .New Zealand's demand for taxes and subscriptions to loans are expected to greatly reduce the amount of deposits with the banks—about £78,900,000, including £31,800,000 at call. Advances amounted to £49,350,000 and their tendency was upward. Demands for financing .primary production will presently be coming in and will have to be satisfied in order to keep the business of the country going and that as an important part of New Zealand's war effort.