A CAPITAL LEVY

Nelson Evening Mail, Volume LXIV, 25 June 1931, Page 3

A CAPITAL LEVY

AUSTRALIAN FINANCE Commenting on the proposals which have been adopted by the Premiers Conference in Melbourne, Jobsou s "Investment Digest” says the conversion loan is in fact, though not in name, a capital levy. It means that within Australia, money is taken put of the commodity class and placed in the net price class. That is to say that so long as the restriction on interest remains, as it must remain for some years, money will not have the earning capacity which it has as a- commodity and one consequence will be the necessity of the banks and other institutions maintaining a strict control of the movement of capital out of Australia. This will be necessary because money is ordinarily liquid and will move of its own accord to where it obtains the best return and It is very essential for the rehabilitation of Australia that money shall be retained in the country, the capital value as reckoned in earning power ot money invested in Government bonds will decrease by approximately pm- cent. To some extent, this loss wiil be onlv nominal, and the loan being for a fixed term the value of the stocks will gradually recover, provided that money does not leave t.lie country in too large a volume and that the cost ot living is so reduced as to increase the earning power ol the community.