THE LOAN.

Lyttelton Times, Volume CXVIII, Issue 18571, 25 November 1920, Page 6

THE LOAN.

Fsw people will be surprised to leorn that tho Finance Minister is postponing the closing of the six-million loan because of the amount being undersubscribed. Mr Masaey is not very explicit on the matter, and he has not yet fixed the postponed date of closing, but he confesses that the applications are short of the sum required, and says that if the full six millions are hob subscribed "voluntarily" he will use tho compulsory powers given to him by Parliament. We are afraid that not very much money has been voluntarily put into this loan. The fact that forward sales have taken place at as low as £BB is eloquent enough to prove this. Mr Massey is endeavouring to borrow a very large amount from private individuals for public purposes at a rate that is below that ruling in tho money market. Ho is raising this money for the doubtful purpose of buying land at inflated values for settlement. That the land is required for discharged soldiers is the one redeeming feature of the undertaking, but even this recommendation does not vitiate the right of any citizen to question the wisdom of tho policy. Indeed, there are many who believe that the interests of ex-soldiers are really jeopardised by the land-pur-cliaso policy under present conditions of swollen land values and falling markets. But there is another reason why it was not to be expected that the loan would have been floated by the date originally fixed. We refer to the complete want of enterprise that has been shown in the flotation, or tho attempted flotation. There has been only one announcement in the newspapers, and even that emphasised the threat of compulsion and subordinated all that might have been urged in favour of tho loan. There has been positively no attempt to popularise tho loan, if that were possible; but beyond that the Ministry of Finance, or the Treasury, or whoever may be responsible, have not even kept the prospectus and the date of closing before tho public. The authorities have manifested a feeling of indifference, and to that we are. inclined to apportion a sliare of responsibility for the failure. Mr Massey, however, has the power to Vmpel subscriptions to an extent well beyond the amount of the loan. We think it was improper of Parliament to grant this power and that the raising of a forced loan is confiscation pure and simple. But the Prime Minister insisted upon this course and it remains for him to carry out the unpleasant job that he has imposed on himself. Before it is all over we fancy Mr Massey will have discovered that the only Bound way of obtaining loan money is to pay the market rate for it. He will not pay lobs than the market rate for tho land which he buys with the money—when he completes the raising of the loan. It tho Government and Parliament considered the terms of this loan to be justified, in view of the obligation to settle discharged soldiers, a much more straightforward course , was open, namely, to issue the bonds to the vendors of land.