WAR FINANCE

Otago Daily Times, Issue 17038, 23 June 1917, Page 4

WAR FINANCE

AT JjfOME AND IN NEW ZEALAND.

'1 Speaking 1 at the annual meeting of the • ■ Bank of New Zealand yesterday, Mr H. 1 Beauchamp, chairman of directors, said:— ;i "The Acting Minister of Finance has alj warned the country that the Govcm1/ ment will issuo another war loan as soon as the necessary authority is obtained from j< Parliament. Having regard to the heavy 'j' strain on the financial resouroes of the Mother Country, it seems to mo to bo ■ ■ j; only, right that we should endeavour, with- . in the limits of our resources, to finance Cj our own war expenditure. The objects of v. the lban must appeal to the patriotism of >• w/ every section of the community. Much of t the money raised ivill bo disbursed in tho ... J: dominion, and a substantial portion will ..., 5. go towards the support of soldiers' rela- ' tives living here among us. Wo must,- ,! therefore, as loyal subjects of the Empire, • I and as good citizens of Now Zealand, be in favour of tho loan, and accord .it our >? sympathy and support. The financial posij,- tion of the. country, to which I have just 5 referred, is_ such that there can be no "doubt ' ■ a of our ability to provide what is necessary. *1 Tho Earl of Derby, Minister for War, , ji speaking on. tho subject of the British —-3f u Victory' wax loan, stressed the point ji. again and, again that tho three things necessary to bring the war to a speedy and : : £ satisfactory conclusion aro money, men, £ and munitions; and ho farther specially emK phasised that those ncccssories are required : * m the order in which they aro stated— ■ . ■■■ !j money being tho first and greatest cseenj tiaL I am sure, if the pooplo of this cotinS try can bo brought to_ realise that fact, the ,♦ fate of our own 1 Victory' war loan will ;Sn°t bo in doubt, and it, would bo gratify--5 ing if it were crowncd "with a success pro- ... £ pot'fcionately as great as that which attended ■vtho '"Victory' loan of tho Imperial Goi vernment, to which over £1,000.000,0C0 were •su bsoribed,—an amount exceeding tho Bji1. .tish Treasurer's most sanguino estimato by .* about 50 per cent. Hero is a way in which !: :j those of us, who are incapable of bearing ; a rtns» a fd enduring tho fatigues and hardl >5 6hip3 of warfare, can contribute an essenI < '' a ' to victory, and do our part towards I tho achievement of tho indjspens-iblo end I in tho ouly way possible for us. Following upon the successful issue of the British war loan came a temporary 'slump' in the value of London money. Tho Bank of England > r&duced its rato to 5 per cent., and Loudon discount houses to 4i per cent. Tho rato for day-to-day money fell as low as 2J per oent.; lending rates dropped all round, and prices of investment stocks advanced in sympathy., This was due .to the fact thai • loan subscriptions placed the British Goveriiment in a position to redeem all maturbills, and thns a large amount of money was thrown upon the market ■ seeking Many of tho British banks had borrowed heavily from the Bank of England to put themselves in a position to finance their fcustomers' subscriptions to , war . 2J 1 ' theeo advances by. tho Bank of England were 1 fixed 'for a term, tney oould not bo immediately repaid.' It .'is iv however, riot to b© expected that this position will last long, though there is no roa-'on to anticipate a return to really dear f .', money in the near future. Tho aqvcnV of America, into the war zono vrill appreciably ease, tho < financial strain on Britain, for it is tho intention of President W;ilson to assist tho Alliee financially, nnd already England, France, and Italy have been handed substantial chwmos, and l Russia is alfio receiving help. The hture 'Victory ' loan issued by t.ho British "Government, and which, aa I. havo already paid. ;• was a remarkable success, was insufficient to m«ot rwrrrarrrrionta, and limited i«-up3 of Treasury bills (by tender), having current ■ cite up to twoJve months, were lato i in March. The issue of 5p ■ cent. Exchentier bonch. repayable April 1, 1922. or ■on October 1, 1919, if desirrd bv tho holdeT. was also early in April, ami still continues. Some of the boJßgerents aro not findinc it eo«y to raise money, and novel exofdirnts aro War resorted to. The TtAlian subscribers to '■ their 5 t)«r cent, loan, issued at 90! to p«v c 'ib?crintion<i in F'ench rentes pnd Frcncb Troasnrv bills. The French Government, has evolved a new form of Trensnrv bond with a cnrrency of five years from date of , . issue. InW'vt is at tho rate of 5 per errit. '. mvnfelo half-vearly in ftdvanro. After months havo elonsed the holder miy -tlie moner. provider ho eonsente forfeit three month*;'' interest. If mvitnp robin this sreiiritv for the full fc:•■..■.!>Wm of five yonm. lio rreciv< , s a bomn of f :2 i per amt. .WWlo an tho subjpet of

loan 3, I may mention that in April the Government of the Commonwealth ot Australia lßSuod a publio works loan in London for £3,500,000. The rate of interest was 5J per cent., the price of issue £98 per ocnt., and the • currency of the bonds 5-10 years._ Debentures of the loan are convertible mto 5£ per cent; registered stock at any time up to 50th June, 1917. The issue is reported to have been very successful, the underwriters being entirely relieved of their responsibility for full subscription."