TAX-FREE LOANS

Otago Daily Times, Issue 18721, 27 November 1922, Page 8

TAX-FREE LOANS

SIR JOSEPH WARD’S CONTENTION. (Pee United Peess Association.) WELLINGTON, November 25. Sir Joseph Ward expresses surprise at Mr Massey's comments on tax-free loans. He contends that, so far from being a loss to the country, they saved £300,000 per annum ; for if the loans had not been tax-free the country would have had to pay at least 6 per cent, instead of 4i per cent. Large sums were provided' by people who do not pav income tax. The banks subscribed £6.000,000, and if the proposed reversion was to further increase the banks’ taxation —already the highest in the world—it would mean an increase of the rates of interest to their clients. " So far from these loans being rushed, said Sir Joseph, “it was only with the greatest difficulty that the money could be got, and many investors raised it at a loss, and are still losing on it. Now, after th® event, to hear of people suggesting a variation of the terms, which would mean repudiation or thieving, is certainly a matter for deep regret, and a course which tins country would never agree to. As to the offer to convert at 5J- per cent., those with incomes under £3OO would be fools not to accept it, for they would get more interest.” But Sir Joseph Ward said ho could not see what advantage this would bo to the State. It was easy to profess wisdom after the event, but the irrefutable fact remained that there'was no cheaper or-more effective way to raise a gigantic sum of money. If there was. why did England, Canada, Australia, and the United States take the same course? If Mr Massey or any other member of tha National Government could have suggested a better way it was his duty to have done so and he contended that it was ungenerous now to comment unfavourably on what was the only way out when tile nation was in great stress.