TAX FREE WAR LOANS.

Hawke's Bay Tribune, Volume VIII, Issue 284, 1 November 1918, Page 4

TAX FREE WAR LOANS.

The resolution passed by the Chambers of Commerce Conference at "Wellington yesterday, urging the Government Vo discontinue the issue of War Loans free of income tax has very little hope of receiving favourable consideration from the Minister of Finance, for the obvious reason he secured the passage of a clause in the Finance Bill last session providing that investments in the current and future issues of War Loans shall be exempt _ from t.he tax. We believe wc are right in stating that Mr. S tatham, member for Dunedin Central, suggested that the clause should be amended by’ the substitution of the words “may” be issued free from income tax. instead of “shall be free etc.” And that Sir Joseph Ward refused to accept any such amendment. The position nw is that at _ the end of the war the Dominion will be carrying a very heavy war debt at a high rate of interest,* and extending, over a very long period, during which the fortunate possessors of the , bonds will not be taxed on the income they derive from their investments. We* have frequently stressed in these columns the disadvantages re-, suiting to the Dominion from the issue of free from income tax bonds, and we now find that our contentions are supported by recent developments in American finance. It appears from an announcement made by the United States Treasury Department that the Government has decided to fix toe rate of interest for all future American war loans at 4j per cent, so that all business and all investments may be adjusted to- that basis. Consequently the Fourth Liberty Loan which has just been floated bears this rate of interest which was also the rate fixed for the ilrird loan. The first Liberty’ Lean bore interest, at- 31 per cent, but bonds of ibis loan are exempt from taxation. The second loan, which is subject to fax. ben-s 4 per cent, and the third loan, th* final result of which was announced last month, bears IJ,1 J , per cent interest, and realized the highest total of all. £835.303.370. The Bill au : fhorising the loan provides for • flg QOO.odO.GOO of bonds ( £1.600.000. frt'i(i) but this does not- moan tbar I such a vast sum was offered in t.io | Fourth Liberty "Lonn._ <->rdv St; non.600 of Certificates of Indc-btecir.oss I (the American equivalent I Treasury Bills) was a-uthorize-d ir i anHeination of that- loan. Tn a 1! ■ .«22.<Vh).000.<900 (£.’.4C( .CiOO.OOid ip b'miis pave been authorized undev rhe several liberty Loan Acts. The first was for &2.000.000.0t.i0. the second for 57.538.945.460, and the third * 1.461,054,950,

to bring to light certain acts achieved by England during these, four years of stubborn and difficult war—acts which have partially accomplished the noble ideal for which England drew her sword. There is no doubt that the complete realization of the ideal is a question of time. As I am concerned with th" redemption of Mesopotamia and Palestine, T wish to take Mesopotamia as an example. We must not underestimate nor ignore the farreaching effects of English victories in these countries.

It is only since the Turkish coneiuest of Mesopotamia, under Sultan Selim in 1515, says the young Syrian, that this country has turned into a desert and gradually lost its fertility : through misrule, oppressionend lack of security that ancient and quick-minded peonle are reduced to an estate of stagnation and somnolence. Thanks to the destructive nower of Turkey. th°re is no trace of intellectual development which was produced in the _ time of th" Calinhs through the reciprocal action of the Persian and Arabic element. Tt is certain that nowhere in the whole world was the principle of annlication of canals for agriculture so successful as it was in Mesopotamia. TV>o most luxuriant vegetation was diffused over the whole country, and tnree crops obtainable in the year. In remote antiquity it attained a high civilization, and for . centuries played, it may be said, one of the principal parts in the history of th', world. In the matter of civilization no country of the world was its equal, a multitude of great cities flourished within its borders. What a contrast between the Turkish and ancient Mesopotamia. The difference is lamentable, heartbreaking.

Thon in joyous exultation the young student exclaims: “Now the situation is quite altered. ..England iia-a saved tne country from utter rum and its people from total destruction. English liberation of the country has opened a new and a golden era for its people. The characteristic English sense of justice, fair play, and liberty on the one hand, ano England’s centuries of administrative experience and leadership on the other hand, will enable, it goes without saying, Mesopotamia to recover its former position politically, intellectually, and economically m the world. What England has done in such a short time in Mesopotamia notwithstanding the existence of the war, and the very friendly and syrooathetic attitude of its people towards the English, are a good testi mony to our well-founded and legiti mate hones. The Mesopotamian’;heart is bearing with joy and is fill’ of gratitude. In a word, the redemption and liberation of Mesopotamia and Palestine from the poisonous ele ment have brought the world nearer to the complete realisation of the groat object for which the Allies ;> r striving so bravely md so n’.np-n-O cently. Is it not, then true to declare that England has already done much towards the fulfilment of her ideals ? ’