MORATORIUM SOUGHT.

Press, Volume LXVI, Issue 20102, 4 December 1930, Page 15

MORATORIUM SOUGHT.

plight of daiky farmers. deputation WAITS ON ministers. special parliamentary SESSION URGED. [Tin: FKESS Special Sorvlco.j

WIXLiNUTOX. December ;{. Tfce first definite request for the calling of a special session of Parliament the Object of granting a moratorium oil mortgages was made by a 'deputation from the National Dairy . iisociation and the Dairy Produce Control Board, which waited to-day upon jjr Apirana Ngata, who is acting on s fchalf °f tha 11011 - E " A ' Eallsom in ; jj, absence, and the Hon. K. Masters, : Acting-Leader of the Legislative Coun- : t il and Minister without Portfolio. ' The speakers emphasised that the ■ jurying industry was passing through ? worst depression ever experienced, ' iad the fear was expressed that unless j'lle Government took immediate steps S't» protect the farmers many would '■wold hare to walk off their properties. It wm pointed out to the Ministers ■ tut even without having to meet finan- ' (id obligations, farmers would not be jJda to carry on at the ruling market ' aise. It was ,lelcl to be essential that it bast part of the present interest pjrments should bo capitalised to en- ■ jhla the 'farmers -to survive the depresjjjß,and to tilis end a measure of pro'fcetion from the Government was ,lecmed to be of importance. One member of the deputation pointed at that the provisions of the morattfimii granted during the war wouid sot meet the present trouble, as it «uld be necessary to safeguard thoso ; nho could not afford even to pay intertit. A definite lead was sought from the Government, and a proposal was made that Parliament should assemble in February to review the whole question.

Sir Apirana Ngata, in replying to th.3 i deputation, said it would be impossible ! to come to any decision until the Prime Minister, the Kt. Hon. G. W. Forbe.s, returned. He acknowledged the seriousness of tho position, and he sugi gested that a small working committee ihould be let up to carry out research He questioned whether the calling together of Parliament would prove tho sovereign remedy, and ho said every ' other possibility would first have to be explored. Ho promised that as soon as Mr Ransom returned to duty next week, the position would be placed before him. I The deputation was introduced by I the Hon. J. B. Gow,. M-±j.C. I "Critical Stage Beached." |i" Jfr A. Morton, president of the Naioial Daily Association, said a critical Lbge in the history of tlio dairying inistry had been reached. Ho believed iat prices had dropped to a level Sotted about six years before the ; nr. The position had become exceedisgij serious, and advances on export til been reduced to as low as a (trod on cheese and 9d on butter. "The position to-day is that wo last to keep up our production abovo ■ >ll things; but it is going to be exceeding difficult for the dairy farmer to 1, fcttat," he said. "Tho farmer is ', set kblo to reduce costs in any form tlltever. He is still up against high tocta of production. He still has t,o py interest and his rent, and I vent an tony that in a great many cases, iftkdiiiy armer were free from any %ltion to pay interest or from any wrtg&ge on his land, and if lie did Mt lure to pay rent, even then tlio ptient prices Viould not enable him to Pj" the eosts of production for butterit" Pear of Foreclosure. A large number of dairy farms were ;Mier mortgage. If something were done, mortgagees would be allowed ,fe foreclose, and the position would be "watoated. If it were considered right tobring about a moratorium during the "if time, it was considered that the PHeat situation facing the farmers *®J«nted similar action being taken, w Apirana Ngata: The moratorium is really a matter that affects eiiridaal farmers. What is the position "tie dairy companies? I St Morton said he did not think the 'SBpanies were suffering heavily 11s far Utleir finance was concerned. Under to-operative system a dairy comprovided it was conducting its •wsess as it should, did not pay out than it considered was justified jTmaiktt priees, and if it did happen "make overpayments it was entitled * ffiske reclamations. Unfortunately, * «omc cases these reclamations were made. . w Apirana: What is their position fsgfttd to rural intermediate credits? Jw Morton said he could not say offHe understood that some comMes had taken advantage of tho sys?'.bnt he could not say for certain, '■i information would bo in the hands "tee Government.

; Extreme Eamedy, Says Minister. Sir Apirana said the extreme remedy » been suggested; but naturally it •isi- aire '' '° ex ploro every other 'ty apart from the allowing of ta He desired, for instance, at the proportion of the in . 8 c . r ® a ffl cheques that would have ® overnment DepartMht rtoa he appreciated the ijarv Was not ono w h°> the WI.J COUrSa °f event 3, believed in •v e generally tell us that when flisi "w* 'fining," Apirana reteow i, * 3 ra i n i n fe w e want to ! f«itim mac h the Government can come into the picture."

TTCews of Dairy Bcerd. t e A- lorns, chairman of &*t S3 Control Board, said :st . n ..° l u Sh that bodv was Psatinif if y favourable "to the ®bt!nn „ a Moratorium, a recent rcttot tn § asse< * by it urged the GovornfT produMr°™u' hing h . ol P f , hc P rhn ' in tk i was f ac " n g the worst !, ISto , r y of thc Dominion. It souipth- 0 Government should fo^, the nla " «'ho was ~trv a Z: . ull ' e . They believed that j* Primary ulr] , be S ivcn to r ' an( * to the small Producn ln » P ar t'cular, so that he * a«es w! at ru!m e P"ces until bet--5 w ere experienced.

[lsf Bettlers Represented. £ iri <ige , D^ w S a ' of the 8(14 lot Z>\P Company, who also 1 ioldler settlers, said that

while many people were speaking in generalities, it was the decided opinion of many that the Government should tie asked to pass legislation to bring about a moratorium or to effect, a general lowering of interest rates. so that at least some part of the present, interest payments could be capitalised to enable farmers to conic; through the present diflicullies. The. primary producer had done a great deal to help the country, and he thought they could look to the Government for help with conlidence. Fanners' Greatest Fear. Mr W. D vnes Jfulton, chairman of Ihe New Zealand Co-operative Dairy .''onipany, said the greatest fear among the farmers to-day was that they would be forced to walk off their land. He received almost a constant stream of callera from Muiulay to Saturday, and it was absolutely impossible for his company, or any other company, to meet the demands for assistance that were pouring in from the farmers. All feared that they were going to be forced to . leave their farms. They were being ! "pushed" by banking institutions and money-lending organisations to meet the' liabilities which they had incurred. While he realised the anomalies of a moratorium, and the drastic step it involved, Mr Fulton said lie believed something should be done by the Government. to devise some scheme that would give confidence to the farming community. lit? was perfectly sincere in asking the Government to accept the position, as he had outlined it, as the true state of affairs existing. It was hoped that the present depression would be only temporary; but he was certain that, if the farmers could be given some confidence, the economic situation would be strengthened. "Mussolini Government Wanted." "We require in New Zealand to-day a Government with something like the powers of a Mussolini, to stand up and, say it will be behind the primary producers. and that it will not allow tiieui to be filched by the mortgagees, if they are doing their best, to meet their liabilities," said Mr .T. Jv. Corrigan, a member of the Dairy Control Hoard. '•The price of primary produce 's lower to-dav than any man expected it would be, and I feel certain that if the Government, will say it will stand by the primary producer, provided ho plays the game and keeps producing, it will have a good effect upon every man involved in production from the laud. I think the Government, should give a. lead and give out to the people of the countrv what it intends doing."

Moratorium Difficulty. ''l tliiiilc there is another side of the question that needs to be looked into," said Mr W. P. Hunt, smother im-mber of the Dairy Board. "The request lias been made to restore the moratorium on the lines adopted during the war. That moratorium provided that mortgage money need not be paid on the original due date; but it also provided that the man who owed the money should pay the interest. It therefore protected the man who paid his mortgage interest the whole time." Mr Hunt said 110 better classification of tiie farmers could lie made than those who paid their interest and those who did not. The restoration of the old moratorium would do 110 good present time. Weak farmers would not, therefore, be protected by a moratorium along the lines of that introducd during the war. In fact the weak 111:111 would be placed in a worse situation than ever. He ivould be worse off tuaii he would be without a moratorium. A moratorium unduly alarmed 'people who had money to lend. The man who did not pay his interest would immediately lie liable to be sold up, and this occurred under tho previous moratorium.

Protection for Weak Man. "What is wanted to-day is something to protect the weal; man," Mr Hunt added. "The strong man is not being troubled. 1 do not know of one case in which a mortgagee who is getting his interest asks for the principal as well." "While it may be perfectly true that the moratorium as it existed some years ago did not sufficiently protect the weak man, we do say it is the duty of the Government to find out, either that the moratorium which has been tried in this country can be tried again with good effect, or to find some other method," said Mr J. G. Brechin, of l'ahiatua. "The position when the last moratorium was brought into force was nothing compared with conditions as they exist to-day.'' About GO,OOO people were affected in the dairying industry. Early Session of Parliament. "These are cold-blooded facts which should be presented to the Government, because they all prove that if the moratorium is not sufficient to protect us it must bo our duty or the Government's duty to find some other method," Mr Brechin said. "We suggest that the time is ripe for Parliament to bo called together. There is no doubt that Parliament, which is only the mouthpiece of the State, and which expresses the opinions of the men who elected it, should be called together in February and the whole question reviewed." Sir Apirana: Do you think the industry will last until February? Mr Brechin: Yes; I think so. Sir Apirana: That is all right. That is the first nice thing you fellows have said. Mr J. B. Iline, a member of the Dairy Board, said some members of the Board were not satisfied that a moratorium would not bring with it greater evils than those it would seek to remove. lie thought the question should be dealt with very carefully. They relied on the Government to give some lead. Mr Gow said it was not only the dairy-farmer who would be affected. The country's business was all wrapped up in tlio same bundle, and no section could be disassociated.

South Island's Position. Mr J. Dunlop, representing South Island farmers, said he did not thiulc that exactly the same position was being faced in that Island as in the North Island. For one thing, it was possible that mortgages in the south were not as heavy as he was led to believe they were in the north. However, the South Island farmer had his interest to pay, and the position was urgent. He considered that they should go into the whole position before February in order to let the fanner know where he stood when the disaster came. lie thought it was not far off. Boply by Minister. . Sir Apirana Ngata said that in the absence of the Prime Minister, who had a right to be consulted about the calling together of Parliament, Mr Masters and he could not say anything about the Government's attitude toward _ the definite proposal to grant a moratorium. The Government was like a board of directors, and it was being assaulted from all sides concerning oilier aspects of the economic problem. They were grateful to the primary .producers for putting their position forward. It was the first definite proposal of the kind that had been made. It would have to be considered whether the calling o Parliament together would be the sovereign remedy at the moment. Kvery other method of approach would have to be exhausted. The first thing to be done would be to get down to basic principles and see just what the pio-

primal to "rant: a. innratoiium would involve, and tlu- Government wouhl require t lie co-operation of industry 111 all its phases. The I .est. brain* in in--11 ustrv would have to he marshalled. Danger of Stampede. '•1 think we know the host braim, of the country are not jli Sir Apirana said, aini'l laughter. We ha vi? been told that." A voice: Open confession is good for the soul. Sir Apirana said that various resolutions published had been so much "hot. air," and they had the effect of stamped iii}.i people into Jalso beliefs. The recent Matainata deputation's description of the state of affairs ruling had been lurid, and it was not desirable thai the industry should be imbued with fear. The Government had been (piietlv collecting data concerning the industrv, and also concerning the opciat ions of the Slate lending Departments, and now it was {letting the opinions of the men on the land. Although it might. sound hackneyed, Sir Apirana said, he would jiromi.se that the deputation's proposals would receive ce.rnest eonsideration. r lhe Act-ing-Prime Minister, the Jlon. Ij. A. li'ansom, would be returning to worlc next, neek, and steps would be taken then to see what could be done, not only for the dairying industry, but also for the slieepfarmcrs. The sheepfnrm-oi-s considered that & J,5(>0,000 would be needed to assist them through their 1 roubles, and the question arose, what amount would be required by the dairying industrv.

Mr lireciiin said it. would take £1 .10,000,000 to put the industry on a

paying basis. Estimated £6,000,000 Shortage. Mr Corrigan said Iho dairying industry would be ,-C C,000,000 short this year. Sir Apirana: Well, you can't, expect the Government to advance that. Wo may be aide to get. down to something les-- than that. lie said the position in Australia was affecting conditions in New Zealand more than some realised. lie thought Ihev would have fo consider the appointment. of a small working committee, representative of the Government and the industries concerned. Conferences led nowhere, and were therefore useless. It. would be bettor to let :i small commit tee work with Government officers, so that they could get to the root of the problem and see exactly where tliev stood, and work out a line to be taken. Tt c.ould be ascertained by I his means what was the minimum Parliament "would have to give eflect to, if it were found necessary to call a special session. Tho thanks of the deputation were exti Tided to the Ministers for the sympathetic hearing given.

VIEWS OF BUSINESS MEN. NO JUSTIFICATION SEEN FOR MORATORIUM. [THE PRESS Special Service.J WELLINGTON", December 3. "I can see no reason whatever for a moratorium," declared the New Zealand manager of a company with large linancial interests not only in the Dominion, but throughout the Commonwealth of Australia. "Most of the farmers—in fact practically all who are clients of ours —are meeting their obligations. Of course, here and there a little bit of time is needed to meet interest payments, and when it is wanted we are always prepared to give it on the merits of tho cape. My company certainly does not think a moratorium would bo justified, and we say that with a pretty fair experience of the present position of the farming community."

Experience in Australia. The manager of another large financial institution with its headquarters in Melbourne spoke of his experience of the moratorium in Australia during the war period. "A moratorium was tried in Australia during the war," he said, "but of course, the thing was abused, and caused a «reat deal of trouble. As far as Australia is concerned, I don't think it will ever be introduced again." "I don't think a moratorium will improve the position," he added. "Tho companies are giving definite relief to borrowers, and standing by them in their present difficulties. Under a moratorium they would not get concessions. In 111 v opinion a moratorium is open to a great deal of abuse. If we get a moratorium it will bo taken advantage of, and interest payments will be pushed aside. Some may be entitled to a moratorium; but, speaking generally, T am satisfied it will bo greatly abused, and be a bad thing for the country."

Rural Credit Board's Position. As far as the Kural Intermediate Credit Board is concerned, it is understood that it has had practically no arrears of interest payments, and that in the main they have been met on their due date. At its meeting about a fortnight ago the Board received a report as to"the case in which borrowers, cither direct from the Board or through the Associations, were in arrears with their payments. Despite the adverse economic conditions prevailing, and the fact that provision is made in the case of every loan for a substantial annual reduction of principal in addition to the payment of interest, there were comparatively few cases in which arrears of payment existed. This position was considered by the Board to be extremely satisfacFrom the experience of the Board, and its extensvie dealings in rural finance. there would appear to be little justification for the declaration of a moratorium.

REGARDED AS LAST RESORT. MINISTER ON MORATORIUM PROPOSAL. [THE PEESS Special Service.] AUCKLAND, December 3. An important indication of the .-tops which Cabinet is taking to safeguard the financial position of New Zealand was given by the Hon. A. J. Stallworthy, Minister for Health, in an interview this morning. Asked whether the Government had considered the question of the re-intro-duction of the moratorium, suggested by a recent meeting of farmers, the Minister stated that the Government was clo. elv watching the whole economic position, not only as .ffecting the public finances, but also the wider structure of private finance, upon which the Public. Treasury was built. The Government appreciated that in the proper consideration and conservation of the latter was the surest guarantee of the former. The whole of the resources of the Government in executive and advisory offieers_ and in representative capacities on financial institutions, were being used to

safeguard the position as far as this was pos *ble. The terriffic fall in export prices had produced a crisis which had to be faced. The moratorium was one of the last weapons, if not the very last, to be used. Its repercussions were sometimes more disastrous than the immediate evils sTjuglit to be remedied. It was not likely to be lightly imposed. Policy of the Banks. The Government had reason to l'eel assured that it would be the policy of the banks as far as possible to assist, both the primary and secondary industries over a difficult period. The inexorable demands of stressful times would make it hard for a man with one big farm or more, plus a city residence, plus a seaside residence, plus sundry speculations, two motor-cars, and a bank overdraft. The bona fide farmer or business man with a reasonable prospect ahead of him, and a good reputation behind him, was not in the same category, and had a fair claim upon the financial institutions which was likely to be met. The Government was alive to the whole situation, and frequent conferences were held, as indicated above.