The Ashburton Guardian. Magna Est Veritas t Prevalebit SATURDAY, DECEMBER 20, 1884. Cheap Money.

Ashburton Guardian, Volume V, Issue 1410, 20 December 1884, Page 2

The Ashburton Guardian. Magna Est Veritas t Prevalebit SATURDAY, DECEMBER 20, 1884. Cheap Money.

The first reflection which occurred to our readers when they perused the report of the meeting of the society that has grandiloquently termed itself the “ Colonial Land Association,” which appeared in our last night’s issue, was probably that some people are remarkably easily satisfied. The movement was started some time ago by a Mr J. H. Newlyn, whose enthusiasm on the subject of “ cheap money,” however mistaken it may be, is worthy of a certain amount of respect. Judging from the letters read at the meeting, the members of the Association have not as yet attained much success. Indeed, to nine persons out of ten, the answers received from the Government wou’d have been considered decidedly dispiriting, but the Pendarves farmers look at matters from a different point of view, and are evidently hopeful that next session will see their anticipations realised. What small meed of encouragement the movement has obtained is to be found in the letter of the member for Ashburton, who says that he has consulted with Mr Macandrew on the subject, and that gentleman had expressed his approval of the idea. Let it be noted, however, that Mr Walker does not commit himself to any opinion regarding the proposed scheme, and we should be surprised to learn that he is not in accord with Sir Julius Vogel concerning it, namely, that the project is altogether impracticable. At the same time we can quite understand the desire of the settlers to be relieved of the responsibilities of their past actions, and in these limes there are very few people who are not actuated with a similar wish. With a logic that is charmingly facile, the advocates for “cheap money” argue that as the rate of interest is at the present time much lower than it

was when they mortgaged their lands,

the Government would do an excellent stroke of business by taking over the mortgages now carrying interest at eight per cent, and borrowing money on them at four or three and a half per cent. This is finance made easy with a vengeance, and no scheme could look easier —on paper. Nor do we doubt that Mr Newlyn’s lectures have been received with applause wherever he has spoken; a Messiah who would preach a gospel of this kind could scarcely fail of success. We can picture the farmers foreseeing a time when the burdens which' have become well-nigh unbearable will be shifted on to the shoulders of the State, and they will be able to once again breathe freely, but we arc afraid that this pleasant picture is not likely to be realised. 1 he mistake underlying the principles put forward by this Land Association —and it is a mistake so obvious that only those who are wilfully blind or thoroughly ignorant of the laws which govern monetary concerns would overlook—is that the very term “ cheap money ” has absolutely no meaning. The rate of interest is determined by the value of the security, and if the farmer has to pay seven or eight per cent, on his mortgage, he is simply paying the current rate on that particular commodity. As a matter of fact, the agriculturalist would really be no better off if he were to get what the Association is striving for, for the

simple reason that the rate of interest must necessarily decrease in exact proportion to the increase in value of what he borrows upon. What we have just written is, of course, the veriest altruism, but it has nevertheless been utterly lost sight of in this agitation which has been raised concerning cheap money.

But even should the question be brought within the realms of feasibility, the members of the Land Association would still have to prove that their case is one specially calling for State assistance. Admitting that the farmers’ lot has of late years been far from happy, and that they have had to contend with bad times and unfavorable harvests, it must not be forgotten that agriculture is only one out of the many factors upon which the fortunes of the colony depend. If the principle of State interference is accepted in relation to farmers it cannot be refused to any other industry or speculation that may demand it. Let us put the case thus : A merchant has invested in large stocks, anticipating remunerative profits from the sale ol his goods, but owing to circumstances beyond his control or foresight the market falls, and he finds himself saddled with a heavy loss. Would the idea that the State is to step in and recoup him be considered as other than an utter absurdity ? And yet this is exactly what the Land Association are asking for, and the sooner they are made to clearly understand this fact the better it will be for them, as the continuation of an agitation which can have no practical issue is simply a waste | of time. During the election campaign several questions were put to candidates concerning this cheap money business, and it would perhaps have been better had those gentlemen who aspired to seats in the Legislature possessed the courage of their convictions and said precisely what they thought of the matter. As itis.theencouragementwhich Mr Newlyn and those who think with him received at that time has made them over-value the success obtained by the agitation, and it will probably be difficult to convince them that what they are pursuing is a mere Will-o’the-wisp. To whatever extent we may extend sympathy to the farming community, it should be remembered that they owe their present position more to unwise speculation in the past than to bad harvests, and however hard may be their lot they are simply reaping as they sowed.