THE DOMINION LOAN.

New Zealand Herald, Volume LII, Issue 16007, 27 August 1915, Page 6

THE DOMINION LOAN.

As anticipated, the New Zealanc. Budget contains the announcement of a local loan. The sum to bt raised in the Dominion is £2,000,0CK for expenditure on public works and: additions to railway lines, but it is j to all intents and purposes a war* loan. Because of the war New Zealand cannot appeal to the London market for money to carry on public works. It is essential to the progress of the country that public works should be continued so that settlement and production may be increased. Our war loans are easily j raised in London by the co-opera- j tion of the British Government ; but j any Dominion loans for public works would receive a very different reception, and it is much more advantageous that the Government for such loans should go on the local market. It has been argued that this will increase the value of money for commercial purposes, but it is notorious that there is little demand for money for industrial use and that large sums are lying idle in the banks. The criticism also ignores the elements of patriotism arid thrift which may be expected to enter into this war loan. We may expect a portion of the £2,000,000 loan to be taken up by small subscribers, who will use the flotation for the double purpose of economising on their ordinary expenditure and of strengthening .the public funds during the war period. To the extent that this influences the flotation the money subscribed to the war loan will not be drawn from the. surplus funds ordinarily available for investment. Sir Joseph "Ward in his Budget urges New Zealanders' to take this view of their responsibilities, and there is no doubt that the appeal is sufficiently strong to' assure the success of the loan. Small subscriptions Vare to be encouraged by the issue of £5 debentures, which can be purchased at any Post Office. The interest, 4.. per cent., is the same as that paid on the British and Australian loans. j From a purely commercial stand- ! point tin; inducement is not great. ! "Were Sir Joseph Ward competing for large sums with commercial borrowers, the result of the flotation might be in doubt, for more attractive terms might easily be offered to investors. The appeal is made to the patriotism of the people rather than to their commercial instincts. The best response New Zealanders can make is to prove the loan a truly popular one by the number of their subscriptions. The sum required is £2, per head of the population. If every head of a family in a position to do so purchased at least one debenture the whole"loan would be raised without the slightest financial disturbance and without the bankers of the Dominion knowing where the money had come from.