War-lean Terms Too Drastic

Manawatu Times, Volume 65, Issue 229, 27 September 1940, Page 6

War-lean Terms Too Drastic

CONDEMNED AS BLOW AT PATRIOTIC INCENTIVE

AUCKLAND. Sept. 26. The war-loan terms are condemned as too drastic by the chairman of the Auckland Stock Exchange, Mr J. W. Frater, who said that compulsion would have an adverse psychological effect and would reresult in considerable hardship on business and industry. Compulsion had not been ttied m any other part of the Empire so far, and it was equally unnecessary here. The terms were a blow at patriotic incentive, which was strong in New Zealanders’ hearts. The restriction on the death-duty ;lause would have the effect cf weak>n the market for scrip, thus compelling holders who had to sell to accept a less. He considered that a straightDUt loan at 2* per tent., involving £200,000 a year in interest would have met with a splendid response and would have obviated a great deal ol hardship. “What has been done is, in effect, tc levy a special income tax on those whe in February 1940, paid over £SO of income tax, 1 ’ said Dr. H. A. Cunningham, an authority on taxation. It was not merely a loan, because the stock received in exchange, being free of interest for the first three years and afterwards carrying a low ra*e, was probably worth little more than half its face value. That represented a serious added burden in the case of many taxpayers, particularly business peopl« who had been recently assessed under the new provisions relating to the valuation of stock-in-trade. He pointed out that in the case of previous loans, taxpayers could appeal to a specially-constituted board of appeal and afterwards to a judge of the Supreme Court. It was now left to the Finance Minister to decide whether a person had subscribed in due proportion to his means.