AVOIDING FURTHER TAXATION

Hawke's Bay Tribune, Volume XXII, Issue 117, 3 May 1932, Page 10

AVOIDING FURTHER TAXATION

(To the Editor.) Sir, —In your Saturday’s issue I see that Mr. Downie Stewart has decided that to avoid further taxation he has arranged a loan of £2,500,000 with two New Zealand banks, pledging as security reserves in D.S.S. Mortgages valued nominally at £10,500,000. Now, Sir, presuming that Mr. Stewart has arranged the loan at 5 per cent, at par, we have to find annually £125,000 in interest. Again presuming that that loan is for twenty years and it is then repaid, we shall have paid the banks £2,500,000 in interest and £2,500,000 principal; total £5,000,000. Can you tell me why, if Mr. Stewart can inflate our debts by borrowing £2,500,000 from the banks, he could notes, declared them legal tender, notes, declare them legal tender, hypothecated the aforesaid D.S.S. reserves (which have been pledged to the bank) and created a sinking fund which would automatically redeem the Treasury notes?

I appeal to you, Sir, to explain to me, and to thousands of others, why Treasury notes as I suggest should not be issued, and this tax-ridden Dominion be saved interest in the long run of

millions of pounds, instead of borrowing as is proposed from the banks. In conclusion, I claim that unless I am wrong, it is time drastic action w.c taken to alter the present system which Ims brought the whole world to a state of bankruptcy.—Yours etc., LAYMAN Hastings, May 3, 1932.