THE COMPULSORY WAR LOAN.

Otago Daily Times, Issue 17081, 13 August 1917, Page 7

THE COMPULSORY WAR LOAN.

Sib, —I felt quite complimented when the

Finance Minister said in the Budget that in the event of the voluntary contributions to the loan falling short of the amiunt required he "would ask the Houso for authority to introduce a system of compulsory contribution. In the London Times of November 13, ISOO, appeared a letter contributed by mo on " Australasia's Never, Never Policy," firaoi which the following- excerpt is taken: '"Speaking for New Zealand, resort to the London market is quite unnecessary. Half a million sterling could easily be raised from tho well-to-do classes. Call in a tar. The tax could take the form of an enforced loan, bonds bearing 3 per cent, interest, with, smkmg fund for 25 or 30 years axided, being P u ed therefor. The taxpayer, otherwise bondholder, would not be inconvenienced, as tho bonds would be at one© negotiable at par. .Roughly, during 30 years, £15,000,000 has been spent on railway construction—£soo,ooo a year. The future rate would bo jufit the same." It will be seen from this that I forestalled Sir Joseph Ward by 17 years. On the 16th a leader m The Times facetiously written upheld my contention. " The Thunderer " regarded me as "apostolic." I never felt like that, but now realise that I am decidedly "patriarchal." I invited the Agents-general to reply to my letter. This they did, not forcibly, but in forcible language. I was so decorated with Kr>g.~l gems that the opinions they • professed to hold regarding me were unmistakably plain Mi- W. Pember Reeves, for New Zealand, wrofco thus indignantly:—"Taking Neu Zealand finance as a shocking example, ho goes on to indicate how his hea-ven-born financial reformer ought to set to work. First, borrowing from London might be pruA a. stop to, and tho money for colonial publio works raised internally by an enforced loan from tho 'Wealthier classes. Thero something refreshingly medieval . Qrljoufc this: it smacks of tli© benevolence of Plantagcnets or the methods of Charles Referring to The Times leader of the preceding day, Mi* Reeves proceeds: "Any ignoramus c<t.n be racy, any fanatic can be fervid, but the combination is not all that is wanted when tho writer is drawing up a damning indictment against the honesty, crcdit, and standing of industrious patriotic British communities." From Mr Reeves's standpoint, Sir Joseph Ward and' I must bo equally ridiculous, but tho matter resolves itself into ono of status. Is the honora.blo barouet to be classed among the ignoramuses, or am I to be promoted to the level of that eminent financier ? Mr Reeves concluded: "I am challenged to say how much of the national dd>t- is reproductive. I unhesitatingly say that nine-tenths of it is so, directly or indirectly. This is the security the English lenders have—a prosperous, intelligent, expanding young nation, the wealth, honesty, and energy of which form, in truth, tho safest possible of sinkrnj* funds." Mr Copeland. Agent-general for New South Waloa, said I was scurrilous, and took tho same line of argument ae Mr Reeves. They simply adopted in this matter tho lawyer's motto: " No case, abuse tho opposite attorney." My proposal to borrow half a million a year in New Zealand was argument enough as to my faith in the soundness of this colony. But my opponents ignoiiia uiously jjlxmcloDcd their briefs when they alleged their respective countries' wealth was a sinking fund. Certainly it was good enough security for the money lent, but it oould not by any process of reasoning be construed into a sinking fund. They ignored the most important point, the purport of my letter—namely, redemption of the loans. Therefore tlicy left mo victor in the. field. Anyone reading British Wax Budgets will . y e , observed that a sinking fund is provided to redeem tho hundreds of millions borrowed. Will New Zealand follow that example of sound finance? Of courso, Sir Joseph Ward may deoirj it odvisii/blo to leavo matters in a state of flnx until after tho waT, but > at tho setiJing this dominion should plaeo its finances on an honest footing. Such a disturbing danient as the war is unlikoly for "docades to come. Look what foefchor tharo was in floating loans to rodoom

flx»e falling daa. Ido not rememkw esactly at what rata, but probably as much as, if not more than, the original loan. And all this because a needy Colonial ■treasurer—Sir J alius Vogel—seized the sinking fund that should have gone to extinguish these loans, and his example waa followed ever afterwards as an pt/milloh* principle. I have a hazy impression—it may havo been only a dream—that Sir Joseph. Vara stated that a fund -would aS koa-rt's blood of the oomnnmity. + • Tj®" years ago Sir Joseph Ward izatiated a plan for paying off the dominion's debt m 75 ywrs. The British publio bodies have to provide a sinking- fond for, I fancy, 30 years eo that the fruition of this bcK ot bir Joseph's will occupy 2i times th» I™uT ' . inclDdo that in which it should lwve been wiped out, for the bulk of the Vogol-Afclunson loans should hava been paid off by now. ~1 on firm , ground in prophesying that the 75 years redemption scheme wffl not pan I J b3 m cour f 2 ; 1801110 Wd-up Treasurer, when sufficient has accumulated to make the accretion worth taking, will lay violent hands upon it. But the When have guarantees withstood 'pressure? An Alesander'a sword has always been found to cut the gordian knot. But the scheme has done what jt waa intended for-enhaaced bir Joseph Ward s reputation as a crreat financier. Why should not an Imperial guarantee be obtained when our wax loans are beine permanently adjusted? Britain is lending tens of millions to States so rotten thai there are probabilities the loans will never be repaid.. All wo would require from her is to endorse our bills—give us the benefit of her OTedit. Surely we are a better secor rity than many of those dubious European States? (Vide the Panogyrios of Messra Reeves and Gopeland.) The British guarantee should bo an enormous help to flotation in London, and possibly a great assistance in fixing the rate, as generally British are more favoured than Australian l™-ng Surely Britain should do something for us. We are fighting hor war, in the sense that we had no voice in the making of it. Of course we are only doing our duty; but this adjustment would afford Britain an excellent opportunity Q f expressing hear gratitade by bestowing on us a material favour which would cost her nothing. And more important still, it would constitute a strong link for binding Britain and her off-spring' still more closely together, for surely her children would appreciate and never forget hor generosity in offering them this welcome .assistance.—l am, etc. Wil Stevenson Aickin. Auckland, Auguist 8.