8.—4.

ADDENDUM BY MR. MACINTOSH. 292. In agreeing to that portion of the report relating to " fixed incomes," I do so for the sole reason that the urgent necessity to obtain relief for the Consolidated Fund demands the sacrifice involved, but on the question of-principle I wish, however, to make my position perfectly clear. To assume that, in appending my name to this report, I approve of the principle involved in this particular form, of taxation would be entirely wrong. lam decidedly opposed to such a tax —at all events, to the extortionate extent of 20 per cent., or 4s. in the pound, recommended by the Economists Committee. This, if made not unlikely event, having regard to various forms of taxation imposed in recent years heralded as " temporary " and still in force—would prove an intolerable burden. 293. In my view, a tax of this description must be regarded as possessing all the elements of confiscation, and is justified only —if the plea of justification can in such case be appropriately urged — by expediency and the exigencies of the situation. A tax of this nature, wrong in principle, would undoubtedly inflict lasting injury on the credit and good name of the Dominion, and would press with undue severity on many people of moderate means who have, in all good faith, invested their hardearned savings in securities issued by the State, the interest on which constitutes their main—if not their only —source of income. To this burden must be added the loss to be incurred by depreciation of holdings, the inevitable consequence of reduced interest. Under such a staggering double blow the euphonious phrase " equality of sacrifice " is quite out of place. 294. Reference has been made in the main report to an alternative method of replenishing the Treasury—viz., a voluntary conversion loan. This is equally open to objection, for various reasons. The proposal (in effect an effort to compromise with creditors—an act of bankruptcy)—postulates a unanimous response. Failure to reach this important objective must end in abandonment, or in the coercion of a minority or conceivably a majority, as the case may be ; consequently grave injury to the public credit would result. The use of the term " voluntary "in this connection and in such circumstances would be merely a pretence. A. Macintosh. RESERVATION BY MR. BEGG AND MR. GRIFFIN. Fixed Incomes. 295. We desire to dissociate ourselves from this portion of the main report. While we are in agreement with much of what has been stated in the report under this heading, and particularly with the stated object of securing some general basis or adjustment applicable to all classes alike, we do not agree with all the conclusions which have been drawn, nor do we think that the proposals set out therein will fully or speedily achieve the object in view. 296. We have, however, thought it preferable to embody our views in a supplementary report rather than to express our agreement or disagreement with the different paragraphs of this section of the interim report. Reductions op Interest and Rent. 297. The portion of the public debt domiciled in New Zealand amounts to £115,014,738, made up as follows : — •

The annual interest charge on the above debt is— £ On securities free of income-tax .. .. .. .. 1,423,999 On other securities .. .. .. .. .. 3,879,357 Total .. .. .. .. .. .. £5,303,356 298. We are of opinion that in view of the gravity of the present situation an appeal might well be made to investors to convert their Government securities into loans carrying a reduced rate of interest. The successful completion of a conversion loan would probably take some months, but the

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Rates of Interest. Public. Departmental. Total. £ £ £ 3 percent. .. .. .. 4,810 .. 4,810 3£ „ 4,041 2,593,600 2,597,641 3| .. 917,500 917,500 4 „ .. .. .. 400,039 34,969,321 35,369,360 4£ .. .. .. 30,370,127 6,907,404 37,277,531 5 „ 1,173,600 1,288,030 2,461,630 5| „ 2,388,260 1,510,190 3,898,450 5J „ .. .. 5,897,430 3,785,600 9,683,030 5Ī .. .. 21,476,565 1,298,850 22,775,415 6 „ 29,011 .. 29,011 61,743,883 53,270,495 115,014,378 •