The Taranaki Herald. DAILY EVENING TUESDAY, AUGUST 5, 1919. THE VICTORY LOAN

Taranaki Herald, Volume LXVII, Issue 16505, 5 August 1919, Page 2

The Taranaki Herald. DAILY EVENING TUESDAY, AUGUST 5, 1919. THE VICTORY LOAN

Periodically the Mon. Arthur Myers, who has been ActingMinister of Finance during' Sir Joseph Ward's absence, furnishes a statement as to (he subscriptions received for the Victory Loan, and at the saauc time gives a reminder that the compulsory clauses of the Act are still in force and may be put in operation at any time. With the return of Sir Joseph Ward it may be assumed that Cabinet will shortly determine the amount of the loan and that stops will he taken to place it formally on the market . While the subject is under consideration Cabinet might well discuss the advisability of following the example of the Imperial Government, or even of going a little, further iu the direction of an issue of premium bonds. There is an abundance of money Tying at call at the. hanks to fissure a full subscription of the loan, even if if is fixed at ten millions sterling, and if the owners of that money do not respond very readily to the call the Government has the. power to compel .subscription by well-to-do people. That being so it may be argued that there is no need to adopt the premium bond system or any modification of it. There are, however, other considerations. Very large sums of money will be required iu the immediate future for industrial purposes, for building, for local bodies’ loans, and generally for encouraging greater production in the Dominion. This money must come, from/the deposits now lying iu the hunks, and it is just as necessary that it shall he found as that the Victory Loan shall be fully subscribed. Now if the Minister of Finance can adopt a method of tapping a source of subscription which is not open to the ordinary borrower or to local bodies, he will be materially helping to increase production and wealth which will become a source of revenue through the ordinary taxing channels. If attire same time he can encourage the saving habit among the masses he will have clone an even greater service. The money in the banks is not the savings of the wage earners, and it this latter source which should be tapped. The Economist in an article a few weeks ago remarked that “we have to repair the mistakes of our war finance by replacing credits manufactured by banks with genuine savings transferred to the State, thus reducing the inflated balloon of credit and enabling the banks to do their real work by creating credit for production. To consume little, to produce much, and to place our surplus at the disposal of the Government is still an urgent duty.” That is in England, hut the words apply equally in New Zealand. Only a small proportion of the people of the Dominion pay income tax and can be compelled to contribute to war loans. The vast ma jority are wage earners not liable to income tax, whose aggregate incomes, however, amount to a very large sum. The Finance Minister invites these to subscribe through tbo Post Office by the purchase of war loan certificates, but the response is not nearly as great as it might bo. At the same time the wage,-earners are sending a great amount of money out of the Dominion for investment in Tattersall’s sweeps and are finding a lot every week to keep the totalisator and the bookmakers going. By offering a portion of the Victory War Loan on the premium bond system the Finance Minister might secure much pf the money

that is now going in the directions named, as well a great deal more from people who dislike the idea of gambling on horseracing hut yet hare no scruples about investing in a StarrBowkett building society, which introduces the element of chance or gambling. Premium bonds are an investment at a low rate, of interest with a chance of winning a prize, and that is just what the Starr-Bowkett system is. Why then should a. Finance Minister hesitate to adopt the system, which would assuredly bring him a great subscription. At the same time it would tend to divert money from what is gambling pure and simple and cause it to he invested where it would be perfectly safe and return the investor a small rate of interest. The attractive feature, of course, is the premium or prize which each investor has a chance of winning'. It is worth Sir Joseph Ward’s consideration.