WELLINGTON NEWS

Hokitika Guardian, 25 May 1927, Page 4

WELLINGTON NEWS

PLENTY OF MONEY. (Special to “ Guardian.”) WELLINGTON. May 2:1. Meetings of farmers have hecn hold in various parts of the North Island to discuss matters of interest, hut at all such meetings finance has been the principal topic. If those who voice their opinions at such meetings possessed the mos tsursory knowledge of finance and credit they would never he guilty of making the stupid statements that have been broadeasted nor would they have passed the foolish resolutions that have been passed, and which have been sent to the Prime Minister. At the meeting of the Provincial Executive of the Dairy Farmers’ Union held at Palmerston North the. Chairman said: ‘'What we want is plenty of money on long-date loans and at a reasonable rate of interest.’ No doubt this is what the farmers want, and if money or credit grew on rose bushes they would certainly have plenty of money. But credit is marketable, and being marketable the prices will drop. It is the same with credit of which there is a scarcity* at the present time, and because of that scarcity and because of* the. strong demand the price of. credit., as expressed in the interest rate ior overdrafts and mortgages is higher now than it has been. And that position cannot be altered just lccausc farmers want plenty of money nnl the farmers, like the rest of the community must accept the situation. At this same meeting a resolution was passed to the effect that farmers’ finance was the most serious problem. •‘This meeting strongly urges the Government to place the Advances to Settlers’ Department- and the liural Advances Board in a financial position sufficiently strong to be o! real help to the farmers.” and the mover/ declared that the thing should be fought out by the producers themselves with the Government. The foolishness of that resolution could not have been seen by the mover, nor yet by those present, or it would never have boon

passed. How is the Government going to place these departments in a sound financial position, or find them with “plenty of money.’ -o that it can be ladled out to needy iarmers? To provide the funds the Government itself must borrow the money, and the Prime Minister in hi* speech at Dnrgavillc the'other day p limed out that London financiers are averse to lending to the Dominions where the money is to lie used for re-lending to the public. Apart from this the fact remains that the Government must borrow the money, or obtain it through taxation, before it can be re-lent to the fanners. The Government cannot go on the London or Australian markets j 11 t now. and the best it ran do at present is to see what can be obtained in the local market.

Jt was stated by the Minister for Health (Hon .). Young) that as soon as the Kura! Credits Tiraneh had mortgages amounting to £2:30.000, the Government would issue .V, per cent. liotuls for the amount. The Government may or may n it get ti e money, the probability is that it will get only a portion, for the people arc not flush of cash, at all events there is a very limited amount of idle credit, availab’e for such investment us is disclosed ly the deposits in the private hanks and the P.O. Savings Bank. We ci iae back t; tile point that there is scarcity of credit, and in view ol that it is useless for farmers to clamour for money at a cheap rate. Ihe same Provincial Executive of the Dairy

Fanners’ Union pas-seal a resolution to join with the Farmers’ Union in a deputation to protest at the increase of the hank rate and farmers’ finance generally. It would bo interesting; to have a e'ear definition of larmers’ finance. Tn what respect does it differ from drapers’ finance, or chemists’ finance or traders’ finance? Is farmers’ finance smnAhing special or peculiar in its sc p:> and character? Is it not simply credit, iust the, common or ordinary credit', the use of which the farmers want, and for which they desire to pay as little its possible?. The possessor V the loanable credit cannot distinguish between section or groups of tTfe community, when he lends his credit he wants the highest price he can get. taking account of the nature and value of the security lie accepts."Therg, have been numerous protests against the advance in the overdraft rale, and the Government has been requested to .interfere in this matter. A Minister lias stated quite clearly and definitely that the Government had no power to interfere with the •private and internal arrangements of the hanks. This feature of invoking political interference with trade and finance is very disquieting, and Tf this is persisted in it will do the country a great deal of harm. Supposing the Government had the power to interfere with the banks and order a reduction in the rate what would be the position if the hanks cut down overdrafts by say 50 per cent. This incessant appeal to Government t,o interfere with this business and that, to benefit a section or group is alarming, and the farmers appear to be the worst offenders. Scarcely a meeting of farmers is bold anywhere in -Now Zealand without resolutions being passed asking Government to exercise political power on behalf of the farmers.