LETTERS TO THE EDITOR

Dominion, Volume 14, Issue 272, 11 August 1921, Page 5

LETTERS TO THE EDITOR

WOOL PROFITS AND THE COMPULSORY LOAN Sir,—From the reports in the Press, it appears that Mr. Massey is likely to secure payment of the excess profits on wool due to the farmers; and a correspondent in to-day’s paper suggests that a portion of same should be used for purchasing insulated ships for carrying produce. Whan we consider that the farmers have already received 55 per cent, above pre-war prices for their wool it seems to me that the amount which is received by the Government on their behalf should be held and used as the balance of tho above compulsory lean. The amounts due to each farmer could be paid in 51 per cent, bonds, and if nnyone needed the cash he could immediately realise in the open market. At present the 'compulsion is being threatened on business people who have already taken up their share of this and previous war loans, and who are as severely burdened in their businesses as any of tho farmers are—l am, etc., MERCHANT. Wellington, August 10, 1921. HISTORY REPEATING ITSELF Sir. —In reading “Economical Progress” upon tho financial outllook, I think comparing the years 1890-91, also those of 18S7 nnd 1900, with the pri»sent are not analogous, as the years mentioned were ones of unprecedented severity for low prices. I remember wheat was sold at is. lOd. to 2s. per bushel, oats lOd. to Is., potatoes 355. to 40s. per ton, southern ports. Mutton and wool were ridicuously low (it was only the frozen mutton industry that eventually rallied tho Dominion), and our dairying industry was practically unknown. Then followed an Australian drought, and disaster in all financial concerns here and in Australia, but since 1909 we had remarkably good prices up to 1913, and since then they were phenomenal. It is apparent by tile, amount of money raised for patriotic purposes, also on loan when high rales of interest are offered, and the volume of trade is being done practically on a cash basis in all classes of business, that this does not spell disaster, notwithstanding that we placed 19,000 returned soldiers on the land at an average of J 11370 per man, with yearly interest from j£7o to j£Bs. Thia money has not been lost, but ere long may be productive, if dairy lands, without considering the gratitude w© owe to the soldiers for our freedom. In some instances high prices were paid, but no doubt at the time they wore the market ones. Referring to the Government system of bookkeepihg, i.e., receipts and expenditure, this is very misleading, and by no means commercial practice. We will now deal with the X 6,000,000 surplus. It appears coal (of which an immense quantity is held) is written off as expenditure, and other permanent improvements, suck as additional railways, roads, lands. Otira Gorge, etc., are practically -written off also as expenditure. The system, with a commercial concern, would bo to furnish a profit and loss account, supported with a balance-sheet, and it may show a surplus of iIOO.OCO and vet owe .£100,009. You may ask why ?‘Because permanent improvements, such as additional nlant and buildings, unsold stocks, and book debts, would be treated as assets, less overhead, expenses and depreciation incurred during the year, otherwise the original shareholders would never get any interest. I do not view the outlook quite so badly ns depicted. Doubtless we will experience commercial tightness, with heavy taxation, but it is surmountable compared y-ifh the years from 1887 to 1900. I am, . etc ’’ P. VIRTUE. ' Auckland, August 9.