N.Z ’S POSITION

Hokitika Guardian, 27 July 1927, Page 4

N.Z ’S POSITION

RURAL CREDITS ESSENTIAL. HAMILTON, July 22

New Zealand is living at the rate ol l' 10.000,000 a year more than its income, and paying 251)00,00(1 a year to keep up appearances, declared Mr \V. J. IVdson, president of the Dominion Farmers’ Union, when addressing a packed meeting in the Town Hall last uighi. This statement, made previously by Mr Poison, was criticised hv the Minister of Finance, the Hon. W. Downie Stewart, in his pre-sessional speech at Eeilding, and to that criticism Mr Poison replied last night. He said that Mr Stewart had declared that the statement had no foundation in fact, and he had gone on to state that Mr Poison had failed to distinguish between imports of capital and ordinary imports purchased out of natural income. WORST EXTRAVAGANCE.”' As a matter of fact, said Mr Poison, there were no imports of capital or specie. All loan moneys, as Mr Stewart admitted, entered the Dominion in the form of goods, and. on the Ministers own admission, we had been guilty of the worst form ol extravagance. It was much as if we had been luiying imports with borrowed money.

Mr Poison asked his audience to regard the Dominion as a farm or a business. It was incontrovertible that the capital value ol a larm or business only increased if its productive power profitably increased. What had happened in New Zealand ■* He quoted official figures ol the exports of butter, cheese, beef. I'liamb, mutton, and wool from New Zealand in the past live years, to show that there had been no increase in production in any of them. It might be safely said, therefore, that there was no justification for asserting that there had been an increase fit capital value in New Zealand, in spite of thi' expenditure of many millions of loan moneys in developing the country. Surely, if such was the case, it was evident that we were living far beyond our income and borrowing to keep up appearances. Mr Poison said that a serious feature of the posiion was that interest charges were steadily increasing, and economists were agreed that the return to the gold standard must mean a period ot declining values. ISSUE OF THE RONDS. Financial reforms were necessary, in order to provide cheaper and better finance than was available to many farmers. He discussed rum l ' credits and rural credit bonds, and said ho was glad to find that the Government intended to issue bonds almost immediately. The transfer of securities was necessarily slow, as people applied for loans before their mortgages were due, in order to he in the position to make the transfer. Although nearly 2500,000 of loans had been aproved, only about 280,000 worth of securities was so far in possession. To have waited until the whole amount involved in the bond issue could he .secured in this way, as was proposed at first, would have ontailed a long dei'nv, during which iho Rural Credits Hoard would have been powerless to lend anything. Mr Poison said the bonds would lie the highest class of security in the country. The fact that the Government did not expressly guarantee them made mil the slightest difference. The bonds wore issued against the land of the country, mortgaged in hulk, and with sound appraisals and conservative administration they were as safe as anything'in the world.