THE WAR LOAN.

Otago Daily Times, Issue 16775, 17 August 1916, Page 5

THE WAR LOAN.

OPPORTUNITIES FOft ALL. FOR THE PRESERVATION OF FREEDOM, By tjii: Hon J\'ir.-! Ah;n, Mimti.ji or D 1 1 I.M L. Considerably over SO,OOO of our young men have,gone to the Iront, and 12,000 a:e making ready to go. What are they going tor? 'io niererve for those of us who remain behind in New Zealand and those who by good for. tune may come back, our lair country and all the lights and privileges that belong to those who live under the Brilidi U.'g. The men who bave gone and who are going are giving all that they have to ghe, even life. We who remain behind are asked simply to give of our substance. Money is urgently required, and New Zealanders now ha've the* opportunity to show that they arc as willing to take their share in pro\idsng money as they have shown themselves willing and ready to provide what is even moie important—men. Opportunities arj offered to those with very small means to take up part of the loan. What a satisfaction it will be for each person to feel that he has done something to provide some of the means necessary to carry this war to a successful conclusion! To the well-to do the appeal must come home forcibly, because they have become well to do here in this fair and free land. They will not, I feel sure, hesitate now to make whatever sacriSees they can to preserve their freedom and the freedom of all of us who belong to New Zealand. Applications lor the War Loan will close on Monday nc\t. The total amount which the public is asked to subscribe is £B,ooo,ooo—an amount sufficient to provide for the equipment and maintenance of the New Zealand expeditionary force for a period of about eight months. Investments may take the form either of War Bonds bearing interest at the rate of 41 per cent, per annum, fiee of income tax, with a currency (at the investor's option) of 14 or 25 years, or of War Loan Certificates repayable in five years and bearing interest compounded at the rate of 41 per cent.

The issue of War Loan Certificates is specially designed for the benefit of persons with small sums to invest. An investment of a sum as small as IGs may be made under this feature of the loan scheme. No War Bond, however, will be issued for any sum less than £50. Those persons in the community unable to fight should recognise that a patriotic obligation resis upon them to pay for those who risk their lives for them. If they do so the success of the loan is assured. _i CONCESSION TO INVESTORS. STATEMENT BY SIR J. G. WARD. (Pes United Press Association.) WELLINGTON, August 16. Speaking of the War Loan to night, Sir •T. G. Ward said: " Representations have been made to me by trustees and others who desire to invest moneys on behalf of trust beneficiaries, and they point out that to break investments now bearing interest and not to receive from the Government upon the whole amount would result in loss to those whom they represent. I recognise that difficulty as one that should be met, and I have given instructions to meet the cases not only of trustees but of anyone who desires to apply for investment in war debentures that interest will be allowed jn full on applications up to £20,000—that is, a full six months' interest, dating from Septeni ber 1, provided the applicants apply not later than the 21st inst. and pay the full amount for which they are applying on or before the end of the present month. Those desiring to invest larger sums will be dealt with as-" announced in the prospectus. I have reason to believe that, "peaking generally, it suits the larger applicants to have their payments spread in instalments over the period named in the piospectus—that is, six months. PUBLIC MEETING IN DUNEDIN. His Worship the Mayor (Mr J. _J. Clark) recehed the following telegram from Sir J. G. Ward yesterday: — It would be of great assistance in connection with the War Loan if you could arrange to held a public meeting, at which you and other speakers might urge the necessity of the public taking up investments. All money order offices throughout the dominion will be kept open from 7 to 8.30 p.m. on Friday and Saturday next for the purpose of leceiving applications for investments. I feel sure that vou will be only too pleased to help the dominion iu its new ventuic. In accordance with the wish of the Minister Mr Clark has decided to hold a public meeting in the Town Hall at 5 p.m. to-morrow. ANOTHER BIG INVESTMENT. (Peb United Pre3s Association.) AUCKLAND, August 16. The New Zealand Insurance Company takes up £100,000 in the New Zealand War Loan. GOOD RESPONSE IN CHRISTCHURCH. (Feb United Press Association.) CHRISTCHURCH, August 16. The local demand for participation in the war loan continues good. In. response to a tclegiam fiom Sir J. G. Ward, public meetings aie being convened hero to fuither the interests of the loan. The Post Oflico reports «i steady demand for bonds and ccitificates. WAR LOAN CERTIFICATES. TO THE EDITOIt. Sir, —The one serious obstacle to tho average man taking up war certificates is that lie has no place to keep them. The average person does not keep any considerable sum of nionry in the house, and the certificates, being negotiable, are equivalent to bauk notes, in that they may be mado use of by the holdei. In these circumstances it would seem advisable for tho Government to institute some sjstem of filing the certificates for contributors until maturity, or until required Under the present method no record t ikon of purchaser or of the number ot his certificate, so (hat, if the certificate bo lost, «tolcn, or burned, tho contiibutor or holder cannot recover. I take it that the Government desires particulaily (ho of tho poorer olassrs. Therefore it is desiiable that their intciests should bo safcguaided. A receipt to contributor, a ledger iccord established, and the ccitificates to be issued only when demanded might possibly meet tho ease.— I am, etc., CEimilCATns.

AN UNEQUALLED INVESTMENT, 'jo ui:n ediiob. Sin,—A, I'iany may rot have Jud 1/iouylit JiOiii" to tlifui the importance ot the hi, 100,00) k-uc of tho (Jovuiimenfc War Loan bciii-f lulij sub->cr.bi (I, and the (!j->adt .in..)"' s winch would jcuui to ivnj body ji] I hi! (ioijiii.ioti were, it not so siibt'lib'd, \<» would ii>lc <ou lo lie g<o i <iii»UL"i 1') pubh li 1( tt< i cuiita'j.iua bin 11/ o'ii \iew\j on tlie suljjiU. On all grounds the. tjuuu&s ot the loan is lo br dt.sirtd. 'ilio-o of patnoUsin and the pio|* ■_• treatment of our .sulaiers, having billl \\<U r. X [, r( , vi J |,y ihobo 111 tUtllilitj, med ii A be dwelt upon by us, but th< le arc otb r lca-ons all'ic-tin,'.; the people in a More ot ]cis diftt manner, Jt would appi a p that if l!io necessary •none/ lie not i,usid Ly tho lo.ui it mii-t \v i-Ol by further licai f taxation, in which ail I'ti wis iuii">t, i th( r dutct'y or indueci'y, snaic; a l-o tho (r< d.tot Iho doui'jnon wou'd sullcr, which in many ways would alhct the welfare of tlu people Subscription to the loan doe.-, ;ios mean a saenh-e or Jos. lho iiuostrnent h<u. n<vir been equalled in New Zealand as a c atc and leniuni rativo one, and the return to normal conditions of the. mon y mirkifc in a U\v nais would i(, to command a Rulwtuiti.il prrmium. The inteic«fc will be distributed m tlio dominion, and will lie a\aihble for imestment in, ami development of, <he oountij. In .ihoufc 16 Wars the interc-i < (impounded will amount to tlie original ptineipi,!, lcj.\iny the. investment •nt ict. Firmly b"iiermc»- that full subscription of the loan will b> no less bone find to the mdnidual inhabitants of New Zealand (with vlia.o welfare that of the itHitution in which we have the honour to lepresent the oidmary shareholders is bound up) than to the dominion as pa it oi the Empire, v,e slronjdv nrse all who h-ive the means idle or within -\ icw to apply for as much of tho loan as t'acj c..u r.ltord - Wo ,vq, ete., Makitn Kfnxedt. W. W/.TSON". Directors representing the Shareholders on tho Tioird of the Bank of New Zeiland. Wellington. August 15

THE DATE OF d OSING OF THE LOAN. TO 'XIIK EDITOII.

Sip.,—You liavo pointed out that closing the war Joan on tho 21st inst. gives investor veiy short time to aiiange their finances to suit. In this you are right, but there ib another way it affects tho .-null investors, v,ho most piobably ha\e their money in tho Po-t Uihce riaung> Bank. J3y drawing their money on the fclM, thej ioso interest for one mouth, so that it one lmlLui. of the loan was taken bj sm.ill lincslois in Post Office Savings Bank money tne Govcimnent would make a _ clear picfit out of the small men of £5000, or o\or. One million for one month at Z'i per cent, equals £~833; does it not? The investor;, 10.-.0 lis 8d per cent niteiest the >ear, whiiat tho big in\cstoi, being relieved of income tax, on the investment receives about 5 per cent, all the tunc— I am, etc., Shall Investor.

SMALL LOANS TO THE GOVERNMENT. TO THE EDITOR.

Sir, —The Government invites loans of fcmali amounts fiom £1 to £50, with a currency ot live years, and bearing inteiest at 4J, per cent., which, however, will not bo pajable periodically in cash, but will accumulate and bo paid with the principal on tho expiry of tho term. Certificates, or other documents equivalent to promissory notes, will ba issued to tho tenderers, and thoso will be issued at a discount of 20 per cent, off their iace valuo. Thus a certiucato for £1 will bo issued for 16s, and a face value of £50 will bo obtainable for £40 in cash. Intermediate amounts will, of course, be in tho same proportion. The present value of a loan of £5,0 for five years at 4g per cent., if tho interest were compounded annually, is £40 2s 63d, but taken at 2{ per cent compounded half ■yearly is £40 Os 6d. The latter is, theretore, evidently tho basis of, the issue. Tho odd fraction is of no moment, but jt is practically a small amount ot additional interest payable at tho end of the term. Tho arrangement of these loans is not a usual ope, but it will piobably draw out a considerable amount in the aggregate from the many who do not actually rcquiro the interest to bo paid in cash, and who will be content with its value accumulating as timo goes on, secured, as of course it is, by the stable credit of the Government. With that security theso documents should be realisable at any time during their currency, and they will bo payable to bearer so as to facilitate their being passed from hand to hand. No one certificate will represent more than £50, but any one individual can hold as many of such certificates, payable to bearer, as he likes to purchase, so that investment in these loans is not restricted to £50, but may be extended indefinitely. But in the general market there will bo a difficulty with many in ascertaining tho accrued value at any particular time. Contingencies may arise in any lender's experience which would render it advisable, or perhaps necessary, that he should realise his holding by selling to another. But what will be the value of his certificate when such a contingency arses, if it ever does? And who can tell when that mav be?

It would greatly facilitato transactions if thero vvas_ printed on the back of each of these certificates a table of values such as I enclose herewith by which buyer and seller could find at onco the. accrued value on the expiry of any number of the half years mvohed. That would prevent unnecessary loss to the holder through ignorance of the progressive accumulation, and it would greatly add to tiio popularity of theso certificates as investments, for the ceitificatc itself would show its own value at the t.mo'of any transfer. It would also be a great convenience, and no loss to the Government, if the certificates were exchangeable at the post office for others representing similar amounts, just as notes can be exchanged at anv bank. It is eurely advisable in transactions of this kind to afford the holder every facility. Indeed, the_ greater the facilities and the more negotiable the more popular would the investment bo and tho larger the issue. The table herewith is reckoned at 2? per cent, compounded half-yearly and run out u> the nearest farthing. If printed on the back of cadi certificate the holder could at any timo ascertain the value of his holding.

It has been suggested that that might also bo done by taking for each year onefifth of tho difference _ between tho loan and tho certificate, which includes 25 per cent, for interest for fivo years —presumably 5 per cent, per annum as simple interest. But that is not quite the same thing. Suppose, for instance, six half years at 5 per cent, bo added to the £40, the valuo for transfer would be assessed at £46, whereas the accrued value by table is only £45 14s 3d. Or assume that a loan of £20 has run for fivo half years and 5 per cent, is added the vilue would apnear as £22 10s, as against a valuo bv tho table of £22 7s Id. These d ffercnees aro not very great, but a buyer of 10 certificates of, say, £50, under, that system would bo a loser of £2 17s 6d On the other hand a transfereo with a knowledge of the exact figuresmigl t make a sporting offer to a holder who did not know, and micrht bo able to purchase at a price much below value. —I am, etc., Dunedm, August 14. W. B. [Our correspondent has supplied a table of accruing value of loans, under the war loan certificate scheme, for each half year, of a cmrency of fivo years with compound interest at 2i per cent, for each half jear. As the table is an elaborate one we do not publish it. but we shall have pleasure in submitting it to tho Minister of Finance.— Ed. 0.D.T.l