FINANCING THE WAR.

New Zealand Herald, Volume LIV, Issue 16673, 18 October 1917, Page 6

FINANCING THE WAR.

LOANS VERSUS TAXATION.

VIEWS' OF A LECTURER.

A lecture on " Financial Administration jilt Time of War" was delivered Inst • night at the Chamber of Commerce by i Mr. W. H. Hemingway,; lecturer on economics and law ■ to the : Auckland University, The occasion was. the first of a series of* lectures under the { auspices' of the New Zealand Society of Accountants, : Mr. ,H.'; C. Tewsloy presided,-; and' there was a large attendance of members of tbe association and; the , general public. - . > ...' Dealing first with : ordinary, as' compared with ? ; extraordinary, war expenditure, Mr. Hemingway, referred to maxima governing financial administration; } general procedure >:• of a Minister for - Finance l in H time tof war; and the -I order, ~ sources, and .scientific principles of. taxation. ,! He went on to . consider arguments for and against the raising ? of. public : funds to finance., a war by loans or by increased taxes ; the effect of ;loans on the cost of j living; '" and ; the conscription of wealth. The lecturer argued that for the successful administration of finance in time of war it : was impracticable \ and '■;. undesirable; to rely upon increased .taxation, only, or upon the raising of loans only. An apportionment of ; funds should be judiciously decided : upon to '. be derived ""■ from * each source. The popular loan was to be preferred to the loan advanced solely by the large financial institutions and .wealthy people,';/ particularly those 'in.;, another country. ? A" loan ; advanced almost entirely by ..the banks tended to raise prices. A reasonably high increase, in taxation was to ■be commended, for it :- brought home to the people the gravity, of the war, and encouraged thrift and.; sacrifice.: It was probablv on the whole, bad . finance .; to issue a war loan free of income tax, particularly when the ' rate of '..tax in * future

years was entirely unknown; and the 1 matter was aggravated when there was a ' probability of the rate being ; materially increased. In \ arranging for •'■Sib 1 financing of a modern war regard should be had, to the present social system, and tho distribution of wealth, -as well as to the general : system of the / taxation of >':the j country. A heavy conscription of wealth was , bad. tho ; lecturer V contended, /. and I should only be considered at all as a final resource in the case of extreme national financial crisis. Conscription of wealth amounted to a tax ', on capital.vj To decrease capital by • taxation was a ruinous policy, for " capital was that portion of wealth used to produco further_ wealth,'.' ; A discussion on the points raised in the lecture followed its delivery, and Mr, I Hemingway was accorded a vote of I thanks. ■'■ \ ■ "■ ■-!:'-. '-'■■ .'/'""■ " f "-