PARLIAMENT.

Hawera & Normanby Star, Volume LXXIV, Issue LXXIV, 3 August 1917, Page 4

PARLIAMENT.

THURSDAY, AUGUST 2

HOUSE OF EEPSESENTATIVES

WAR LOAN BILL. The War Purposes Loan Bill was introduced by Governor's message. Sir Joseph Ward said he did^not desire to claim urgency for the Bill, hut he asked the House -to pass it as quickly as possible, as it was necessary to do so before the prospectus for the" loan *ras prepared, in connection with which there was a great deal of work. Mr McCombs protested against such an important measure being rushed through.

In moving the second reading, Sir J. Ward said the Bill gave power to raise £24,000,000, of which £12,000^000 would be raised in the Dominion. About six or seven months later he proposed to raise the second portion of about £10,000,00-0, but it would all depend on how the money strepched out. The interest would be at 4J per cent., free of income tax. He could not agree to raise the interest to 5 per cent., because that would be unfair to investors in the first loan, who, ■ irx a patriotic spirit, came forward and subscribed so liberaliy If this increase took place, he would have to raise the interest of the first loan to 5 per een>t. He was quite satisfied he could get the money at the rower rate, as only to-day he'had received offers from two gentlemen of large sums since they saw the statement in the Budgejt. The Government was determined not to go out of the country for the money, and.it was the duty of everyone who had money to do their share.

Mr Craigie: Why don't you take it as you take men?

Sir J. Ward: "I want to tell the honorable gentleman we do not get money that way." Much of the money would be wanted during the next two months, and they would be able to get it in the way proposed' under the Bill. No Treas- j urer ,at the present juncture could af- ■ ford to go off the beaten track to get money and try experiments. That was why the profits tax was being abandoned, because he could nab rely on the amount to be rais.ed by it, but he had every confidence in the patriotism of the people. Provision had been made to enable certificates to be sold at the post office as in th.c case of the previous loan. . Clause 5 provided that securities to the value of a million might be used in payment of death duties. The term of the debentures would probably be the same as for the last loan, but that was a matter to b.e considered when drafting the prospectus, which must be made as attractive as possible. Mr Isitt asked if any provision was likely to be made to prevent the banks raising the rates of interest on overdrafts in consequence of .-raising these loans.

Sir Joseph Ward replied that he thought that could be provided for, but it was not advisable to dislocate ordinary business methods more Ithan could be helped. He had been considering the question of the sinking fund, which at present provided for the repayment of war loans in forty years. That could lie varied later, but on the whole that period would be reasonable. Mr Wilford said this was the monlb colossal proposal ever put before the country, or, he hoped, that would ever be put before it. This money must be got, and he suggested depositors with the post office savings bank depositing this security with the banks in payment of war bonds. He objected to the limitation of the bonds in payment of death duties, but agreed with the proposal to hold a loan campaign. Mr Lee thought that interest at 4| per cent., free of taxation, was all in favor of the large capitalist. In view of the heavy income tax proposed the large capitalist was bound to rush the loan. If the rate of interest was fixed at 5 per cent, it would be attractive to all classes, and the man who paid high income tax would still contribute to the revenue. If the large capitalist did not subscribe, then he mwst be told his share of the loan was so much, and he must be made to pay. Mr Pearce advocated paying 5 per cent, on the war certificates to a limited amount. Dr Newman advised the Minister to withdraw the Bill and bring down a proposal to pay 5 per cent, all round Messrs Buddo, Wilkinson and McCallum opposed the exemption from income tax.

. Mr Okey favored a differential rate in ravor of small investors. Mr Field (Otaki) protested against tii© wasteful expenditure that was °- oln^ on TvUnder the D?fenc© Department Mr Massey, replying to the criticism on extravagance, mentioned ,tho enormous expenditure an connection with the camps, where' it had been determined to spare no expense to keep down epidemics. The question of transport also arose, and then the men. had to be maintained in England, where we seldom had less than 10,000 men. Hospitals had to be maintained, to say nothing of the maintenance of the men at the rront. It was a mistake to suppose our men only cost 5s a day. The coat was nearer 12s a day. He admitted there was waste. He had seen it ki France, and it seem.cd inseparable from war. He claimed that wealth was being con-j scripted by means of the income tax and that any other method would do the greatest harm to the credit of the Dominion. Money could not be got from the banks by the wealthy, because if everyono asked them to pay out to the Govern>nent at once the banks could not possibly lend enough to all and mnancial chaos would be the result While conscription of wealth was a very attractive theory, he was confident it was impraqticable. As soon as the end of the war came, the extreme rate of income tax would cease gradually. If the majority of members thought the National Government a mistake, he was quite prepared to take the consequences; but he was confident that any appeal to the country could only result in. a sweeping majority for the National Government.

Sir Joseph Ward, in reply > said the idea of the rich being favored at the expense of the poor was a misconception. The people who raised this bogey forgot that if the rich people did not subscribe their loan could not be raised. In the last loan he gave the poor people an opportunity to subscribe, but only 120 people from the North Cape to the Bluff purchased £5 bonds. Such a result led to a fiasco, and no loan could be raised on that basis. In reply to the argument that the loan should be raised at 5£ per cent., and be subject to taxation, he said tharfc investment would return a rich man £3 8s 9d per centr, and if the loan was raised at 5 per cent, it would return him £3 2s 6d. Was anyone insane enough to suppose that such a j return as that would induce anyone to invest in a loan like that? To prove that tke small investor was getting encouragement to invest, he quoted the circular issued in the last loan to shew that the holders of certificates received 5 per cent. Regarding the term of the loan, the experience of the last loan showed that the majority of investors favored 25 years, but all classes were being catered far, hence different periods were arranged for in the Bill. It' was the mature decision of the Government that ■She loan must be raiser! in tho Dominion, and though they had been told that rich people were going to ' rush the loan, the opinion was that it would not be raised without • a campaign and he askeS everyone to assist

in such campaign to the best of his abilities.

He believed that if the necessity arose the people of the country would be ready to give up all they possessed to save tlio Empire, but the notion of conscription, of wealth, suggested in the debate was nothing short of robbery, while the method proposed in the Budget was legitimate. The Bill was read a second time, and the House rose at 10.12.