THE WAR LOAN

Otago Daily Times, Issue 17083, 15 August 1917, Page 5

THE WAR LOAN

ENCOURAGING SMALL INVESTORS. MINISTERIAL EXPLANATION. ? i- • (Fhom Oun Own Cobezspondekt.) ' WELLINGTON, August 14. •" In tho House of Representatives thia ■ ' afternoon, Sir Joseph Ward made a statement regarding the proposal for receiving war loan investments through tho Post Office. He eaid that the Post Offico would issue 4 certificates with a currency of five years'* and 10 years. The five years' certificates*:? would be sold at the same rates as for tho " last loan—a £1 certificate for 165,-a £10,,* certificate for £8, and a £100 certificate' l for £80. Tho 10 years' certificates would; > bo sold as follows:—A £1 certificate for ?. 13s, a £10 certificate for £6 10s, and a £100 v* " certificate for £65. For the benefit of small " investors, for whom this form of investment 1 was not suitable provision was made to ' enable anyone under certain conditions to- i; apply to the Post Offico for amounts up to ; ' ; '- L '' £500 at the rate of 5 per cent., interest';'* payable* half-yearly. Tliis interest would ; *j not bo free of inoome tax. The reason for' this was to ensuxo that only people of small means could obtain the benefit of tho 5 per cent. rate. Applicants for the loan on'-£ these terms would bo required to sign a v declaration that they were not income-tax.*-payers, 'lhe currency of this section of the f loan would be 10 years. Sir John Findlay: Will you allow small," investors in the last loan to transfer? Sir Joseph Ward said that all the small v: investors in tho last loan had taken up commuted certificates. He would,' how- j ever, .make provision to allow those who wished to transfer to this loan for 10 years " at 5 pel* cent., to do so. It was very important that people should understand that • these investments were open to small, investors only. He had found out that one ' 2 person had invested £14,000 in commuted-' certificates in the Post Ofiice. The, object ' was, of course, to have only a short ternv / investment. Dr Thackcr: You ought to have him on '» Somes Island.. Sir Joseph Ward said that this was tlici ; reason why the Government asked thai^ l any person applying for 5 per cent, bond*'-7 should sign a declaration that ho was not f an income-tax payer. Dr Newman asked whether the Treasurer, was likely to have arrangements made by which the banks would lend money to persons who wished to take up money in the; loan. Supposing a man had £1000 and'; wished to take up £1000 in the loan, would v the banks lend him the money at a certain ' rate arranged for? In England, when tho 1 Victory War Loan was floated, some insurance companies made considerable advances vto investors in the loan. If a man paid £100 down the companies would advance him--® £900 for 20 years and insure his life at same time. He would suggest that arrangement, Which worked very well isi" r : England, should be made with the insurance companies here. Another suggestion : he had heard made by business men was y that_ the second section of the loan be issued about March, after the harvest *' and shearing were over. If this were oonai-J the loan would have a much better chanco of success than if it were issued in Decora- < ber and January.' Sir Joseph Ward said the banks had ° agreed to allow advances at a reasonable 1 rate to clients who 'desired to invest-in tho ' war loan. the banks had agreed to-5 this. It was not to bo more fcll&n 54 * pox ~"i cent. Sir Joseph Ward, in replying • to. tho second part of the question, said that tho * scheme by which the insurance companions worked in England was made by the volun- " tary act of the . companies, li any com-V pames operating in New Zealand wishedS to adopt a similar scheme they would be-" 1 given every opportunity of doing so. Jn~i the Taxing Bill members would find the 3 proposals to compel those people who had not done their duty to invest in the loan.-"; As to. the suggestion that the next loan 4 should be floated in March, the date ofwould depend 'on . the amount' of penditure actually paid out between hqw-.C and that time. At present it appeared to' - him that the money raised in the firsts section of the loan would last until Febru— ary. If this proved to be the case-the Go-'i? vernment could arrange for a month's ao- : ~ commodation in order to be able to offer''S the loan at a time when money was plenti- v In reply to Mr E. Newman, the Finance " Minister said ho should say the Government could take subscriptions of up to £50,000 in lump sum amounts would have to bo -spread over four?S payments.