THE New Zealand Herald AND WILY SOUTHERN CROSS. TUESDAY, APRIL 16, 1918. FINANCIAL LEGISLATION.

New Zealand Herald, Volume LV, Issue 16825, 16 April 1918, Page 4

THE New Zealand Herald AND WILY SOUTHERN CROSS. TUESDAY, APRIL 16, 1918. FINANCIAL LEGISLATION.

For some reason best known in Wellington an unseemly rush has been made to finish the special session of Parliament. As a result the public is in a state of mystification as to what the Finance Act means, and it is doubtful if members of Parliament are in much better condition. By a stroke of ill-fortune, or bad management, the Bill was being discussed in the House on the last day of subscription to the war loan, and the effect of the uncertainty as to its conditions and provisions must have been harmful to the flotation. Much interest has been taken in the clauses purporting to compel subscriptions to the loan. On Wednesday Sir Joseph Ward made a statement calculated to allay the prevailing feeling that many who are well able to subscribe were being allowed to escape. It was understood that he intended to set the law in motion, and patriotic citizens were thereby encouraged to subscribe. On the following evening he produced his Bill. It was surprising to find, from the telegraphed report of his explanatory speech, that he had abolished the standard of contribution set up last year, but his vehement denunciation of the financial shirker gave the impression that in some form compulsion would be immediately enforced in respect to the flotations of 1916, 1917, and 19I«. This modified the objection that was everywhere voiced to the abandon-1 ment of the fixed rate of contribu-1 tion and the adoption of an un- j known assessment to be levied by i the Commissioner of Taxes. Now j fumes the Bill in its printed form, I and those who have read it are ask-! ing each other whether Sir Joseph I Ward has any real intention of enforcing equality of financial sacrifice.

In the Bill as circulated there U not a word which could be relied upon to compel, subscriptions inni those who evaded their responsibilities to the first and second war loans in 1916 and 1917. This was specifically provided for in the Act of last year. Sir Joseph Ward has wiped it out, and put nothing in its place There is a provision for compulsory subscription to future loans. It may or may not apply to the loan closed yesterday, but it certainly has no force in respect to the 1916 and 1917 loans. The doubt so far as yesterday's flotation is concerned is due to the wording of the Bill. The compulsory provisions are made applicable to so much of the loan authorised last year as has " not been laised on the passing of this Act." Since the Act was being passed and the loan raised on the same day, it Tnay even puzzle the Commissioner of Taxes to decide which is to take' precedence. If anybody feels disposed to carry an appeal againsV the Commissioner's decision before ! a Judge of tho Supreme Court, there is a delicate point left open for legal interpretation. In any case, the public will be interested to know why the undischarged obligations to the first two loans have been waived. This is not only an unmerited acquittal to the financial shirker it is an injustice to the willing subscriber. From the one point of view the past is to be forgotten; from the other, no credit is to be given for previous' subscriptions. One! man may have lent nothing, another may have strained his resources to subscribe to the early loans. In the j future both are to be liable to compulsion in the same measure, with nothing between the patriotic lender and a gross, and possibly ruinous, injustice but the insecure Ministerial assurance that the Commissioner will see that the Act is fairly and equitably administered. There is a possibility here of hardship, wholly undeserved, being inflicted on loyal citizens, and the effect of it may easily go beyond them and unfavourably influence the market price of war bonds. Large holders in the voluntary loans may come under the compulsory provisions of future flotations. To meet the new demand they may have to put their old stock on the market, with the result that the price will be depressed, and the Dominion's credit suffer

As a result of discussion and criticism, some additional clauses were inserted in the Act before it passed, but they do not appear to have corrected the initial mistake made by the Minister for Finance when he dropped last year's compulsory standard, and inserted new and ill-considered provisions in its place. The Act when available may modify this view, but in the meantime the loan subscription has closed, leaving taxpayers doubtful of their present or future liabilities. One effect of this doubt was to influence cautious subscribers in the direction of holding something in reserve. The Finance Bill was before the House, few knew exactly what it proposed, nobody could say what might be its final form. The knowledge that for the future compulsion was to apply to all persons and companies, to-

Pgether with the reasonable and well

grounded fear that credit would not be given for past lendings, checked enthusiasm for the loan. In the interests of future flotations, an early opportunity should be taken to clear the public mind of all these doubts. Sir Joseph Ward should give an unequivocal assurance that credit will be given for previous subscriptions still held. He said in the House last night that those who had contributed four and a-half times their land and income tax to previous loans would be "treated with consideration." Possibly those who have contributed six times their land and income tax are to be exempt under the clause inserted on Saturday, but this is not by any means clear. If it is not so intended then all who were not subscribers to yesterday's loan are liable for a compulsory contribution, irrespective

of their previous subscriptions or present holdings. There must be thousands in that position, and many of them can put forward the very adequate reason that their inability to invest on this occasion was wholly due to the liberality of their last investment. It is too late now to make the law as it affects the financial shirker satisfactory, but it is not too late to do justice to those who have fully done their duty by their subscriptions to past war loans.