POST-WAR FINANCE.

New Zealand Herald, Volume LV, Issue 16980, 14 October 1918, Page 4

POST-WAR FINANCE.

MONEY SURPLUS EXPECTED.

MORE DOMINION LOANS. I Reviewing the financial situation and the i position as regards further war loans, the ■ Minister for Finance, Sir Joseph Ward, stated on Saturday that in the ordinary 1 course it would be necessary for New Zealand to obtain more money to cany on her share in the war. [ Sir Joseph said it was only natural that j : people should theorise as tc what should j i or should not bo done in connection with 1 the details of the raiding of loans. After all, however, the chief concern was heobtaining of the whole amount of money that was essential. Anyone who took the' trouble to examine what was being done i in the United States and in Canada *■' j present would Bee the full force of what, j ho was referring to, in 'the nature of the details and the extraordinary efforts being I mado by propaganda work in those coun-! tries to ensure the raising of the necessary loans. Canada was raising a loan of £100,000,000 at 5i per cent, free of income tax, and the Canadian Minister for rinancs had publicly expressed the i opinion that the terms provided would' ensure the loans being obtained, also that, i j without it, the country would be unable j j to continue to meet it? financial obliga- 1 | lions for carrying on the war. The rate j ; of tho Canadian loan was high compared i | to what had been paid up to now in New | i Zealand, and, Sir Joseph i-aid. he was not i I in favour of any such rate being paid I [here. j | _ A point which must be taken into con- j : siclor.\tior> among other things was what' , th,i conditions were going to be in the • i money-market after the war was ever. He j I personally was not of the opinion— I I the result of clor-.- examination— interest would bo high after the war, as was thought in some quarters. On tho contrary, bo considered that once tho prefont huge expenditure for war purposes stopped fresh channels must be found for large sums that would no longer be required for such purposes. No one could say exactly what the position would be, but bin conclusion, as the result nf investigations, was that money would not ho high, either in England or overseas, for a long time after the necessity for carrying on the war had ceased. There would, of course, be enormous savings in all the countries now at war, through disarmament, and the reduction in the navies, so far an building programmes and upkeep were- concerned, Sir Joseph added. Under peace conditions neither war vessel* nor crews, nor the equipment for them, would be necessary, and thero must, in the ordinary course of things, be a largo surplus of ships , and men beyond requirements, after the war, as compared with requirements during tho activities of the war. "As a result of tlie money obligations due to the war, not only in'the Motherland, but throughout the Empire," said Sir Joseph, " it will he necessary Jo meet quite a now situation. One ' can only generalise on the dimensions of our war debt, but certainly we are all in for a period of increased taxation. Assuming that the war ends 18 months from now, it is certain that tho heavy taxation we are undergoing at present will be greatly inareased, and T have no doubt, as to the capacity of tho Motherland and tho Dominions to carry their new obligations, until they are extinguished in the years to come, without seriously affecting' or impeding tho progress of the Empire as a whole. "'Tbqre is no need whatever for gloominess. On the contrary, a people which can provide for all its own requirements, as the British have done, and at tho same time make such a powerful contribution to the financial needs of soma of their allies, may surely bo depended upon to meet after-war conditions satisfactorily, and to face tho new world of the future with confidence and assuranco in the power of _ their kith and kin to work out their destinies at least as well as others."

CHEAP MONEY IN NEW ZEALAND.

REVIEW BY MR. H. BEAUCHAMP.

The condition of tho money market was commented on on Saturday by Mr. Harold Bcauchamp, chairman of tho Bant of New Zealand, who is visiting Auckland. He remarked that us a result of tho good prices recoived for our produce from tho Imperial Government money was very plentiful, and it was cheaper to-day in New Zealand than in any other part of tho world. He instanced the fact that whereas Now Zealand had been raising war loans at 4J per cent., free of income tax, Canada now was floating a loan at 5J per cent., also free of taxation. Tho Imperial Government, ho added, had been selling short-dated Treasury bills in New York at a price which gave investors 6 per cent., but similar bills sold in London yielded a return of only 3$ per cent. The low price paid in England, he said, probably was accounted for by a desire to induce visitors to tako .up the longer currency war bonds, but the cause of thie higher price paid in America had not been explained. Mr. Beauchamp said that money in New Zealand was now obtainable on mortgage at from 5i to 6 per cent. This, however, was subject to taxation, which in the case of persons of large incomes meant a reduction of tho net return to the extent of 7s 6d in tho pound,