Why Everyone Must Help

Southland Times, Issue 24755, 28 May 1942, Page 4

Why Everyone Must Help

THE comparatively small number of subscribers to the Liberty Loan issue has already been the subject of comment by the Prime Minister. The amount subscribed so far has been provided for Jhe most part by financial institutions and companies and by persons of substantial means. The average subscription is high. Yet it has been clear from the outset that the loan cannot be fully subscribed without the assistance of small investors —the rank and file of the population—and the Reserve Bank has gone to great pains to enlist their support. For the first time in the history of war finance in New Zealand subscriptions as low as £1 are being accepted. Arrangements have been made for the banks to advance up to 90 per cent, of the price of stock or bonds, and employers are being asked to finance purchases by their staffs. Every opportunity is being given the man of moderate means to contribute some part of his income, however small. Quite apart from the appeal to his patriotism, to which he can hardly fail to respond, there is every reason why he should support the war loan to the fullest extent. People earning up to £8 a week have at their disposal 60 per cent, of private income in New Zealand. If they withhold their support, the only alternative method by which the cost of the war can be met is inflation; and that is a method which is likely to hurt the lower-paid sections of the population more than anyone else. The primary purpose of war finance is to restrict civilian consumption so that men and materials can be set free for fighting. This purpose cannot be achieved unless the mass of the people—the 80 per cent, of wage-earners who have 60 per cent, of the private income—surrender some of their spending power, as they are now asked to do, until after the war. But there is a further reason why people in the lower and middle income groups should, be encouraged, and should themselves try, to make some contribution to war loans. For the sake of political and social stability after the war, it is important that war bonds should be distributed

among the different classes of the population as nearly as possible in the same proportions as the national income is distributed. If such a distribution can be brought about, no class will have cause to feel after the war that it must work in order to produce “unearned income” for some other class. Each class will contribute taxes to meet the interest payments on war loans, and each class will receive in interest approximately what it has contributed. In other words, with an equitable distribution of war bonds and stock the payment of interest in the post-war years will not become the political and social problem—or even the financial problem—that it may be if the bulk of Government stock goes into the hands of a single class.