The Feilding Star. Published Daily. TUESDAY, JANUARY 8, 1895. THE CHEAP MONEY SCHEME.

Feilding Star, Volume XVI, Issue 162, 8 January 1895, Page 2

The Feilding Star. Published Daily. TUESDAY, JANUARY 8, 1895. THE CHEAP MONEY SCHEME.

If the valuers under the Cheap Money Scheme adopt the basis of valuation laid down by the Colonial Treasurer in his recent Auckland address, it will go a long way toward making that scheme as safe as it is possible to i make it. The valuations, Mr Ward said, should be based solely upon " the earning power of the land." That is the true principle, though, unfortunately, it has hardly ever been i the guiding one ia the past in this country. So far so good, that is to be the basis upon which the lenling transactions are to be carried out in order to obviate the possibility of loss, but the Lending Board have other, and almost as weighty, points to consider in arriving at a classification of the securities offered. For example, we will take two classes of property and compare them. One is a farm which has reached the limit of improvement and production years ago (such as the majority of South Island grain farms, many of which have a decreasing productiveness owing to the soil being exhausted), and the other a partially improved bush farm of virgin soil, in a locality where settlement has ample room to expand. A loan obtained on the latter will, in the majority of cases, be expended on improvements of a reproductive character, thereby in creasing the value of the security. In the former case the money will be needed probably to pay off a present mortgage. Which is the better class of security ? Though prices of wool, grain, etc , were still to go lower, the value of the one security might nevertheless be increased by the expenditure of labor and capital, while the other would be bound to depreciate. And there are no securities from the Go vernment point, that is the lenders, to equal their own leaseholds. Whether "bedrock values" have or have not been reached, is more than Mr Ward or any other seer can tell, but in lending the " cheap money " Government should, and doubtless will, follow the above course. Moreover, three fifths of the value may be lent on freeholds under the Act, whereas fifty percent only can be advanced on leaseholds. Again we ask, which -ere the safer" Becurfticß"?"±t these transactions had taken place ten years ago what would be the p -sition to day ?