OVERSEAS CAPITAL.

New Zealand Herald, Volume LXIII, Issue 19235, 26 January 1926, Page 8

OVERSEAS CAPITAL.

The system of bulk storage and distribution of motor spirit, inaugurated in Wellington by the British Imperial Oil Company, is an illustration that will be generally appreciated of the value to the Dominion of overseas capital being invested >in its industrial enterprises. There is hardly need for elaborate demonstration of the economy of handling motor spirit in bulk instead of in expensive containers, or of the importance of a system that provides for large reserves of petrol against emergencies. All owners of motor-vehicles ; at any rate, will watch the extension of the new system with confident expectations that its apparent ecoiwimies will be translated into direct benest to themselves. A still wider public will be interested in the Prime Minister's observations upon the general question of capital coming into the country from abroad. Even those who profess alarm at the growth of the public debt are forced to admit that the development of the country cannot proceed without financial assistance from overseas, but recognition of this necessity has not removed the prejudice against the introduction of private capital, and particularly the suspicion of large organisations, though only these are likely to undertake projects of sufficient magnitude to be of any substantial value in the country's development. Outside the sphere reserved to the State by national policy, there'is a wide field for capital investment in New Zealand, but the public must realise the truth of Mr. Coates' observation, that overseas capital will not be attracted unless confidence in the country's attitude is created. Mr. Coates' expression of the Government's sympathy will help to create that favourable impression, especially as it will be generally interpreted as an indication that the Government will oppose any proposals of unnecessarily embarrassing restrictions upon new capital enterprises. The interest <s>f overseas capital in the Dominion has been displayed in several directions in the last year or so, and it could be further stimulated by an official assurance of lower taxation. There is no doubt that high taxation has seriously checked the progress 'of the country by discouraging industrial development, whether by domestic or overseas capital, and though the rates have been reduced, the system of graduation according to the amount of profits, without regard to the scale of the operations producing them, makes the present taxation an oppressive burden, particularly on new companies, and in all cases where service to the community is rendered on a large scale but at a modest rate of profit