TAX-FREE SECRUITIES.

Nelson Evening Mail, Volume LVI, 30 November 1922, Page 4

TAX-FREE SECRUITIES.

IN his speech at Belgrove on Monday evening. Mr R. P. Hudson referred incidentally to the issue of 4£- per cent. bonds free of income tax, ?or which Sir Joseph Ward, as Minister of Finance in the National Cabinet, was responsible, with, of course, the other members of the Cabinet. After the speech ho was asked whether he agreed with the ccuvso taken. Mr Hudson replied that most certainly he did, and he gave the reason--to prevent the raising of interest in other directions. It was war time, and-for this reason tho step was a good one. Something in tho nature of a wrangle has taken place in other electorates over (his matter, and compared with the usual squabbling Mr Hudson's characteristic frankness is refreshing. The issue of tax-free loans was certainly made by Sir Joseph Ward as Minister of Finance in the National Cabinet, but Mr Massey as Prime Minister, was equally responsible, and he has never attempted to disclaim it. As Sir Joseph Ward stated in an'interview in Wellington on Saturday, England, Canada, Australia, and the United States adopted precisely the same course. That lenders do not feel particularly welltreated may be seen from the fact that tax-free debentures have been sold as low as £BO per £IOO, and at the present time can be purchased at a discount of about. £4 on every £IOO. As Mr Hudson indicated in his reply to the question, it was the war conditions that justified the issue. In ordinary circumstances it is certainly wrong in principle. But during the war the Government, by this means; was able to raise large sums of money at low rates of interest.