The Guardian And Evening Star, with which is in corporated the West Coast Times. MONDAY, MAY 7. 1928. FARM VALLES.

Hokitika Guardian, 7 May 1928, Page 2

The Guardian And Evening Star, with which is in corporated the West Coast Times. MONDAY, MAY 7. 1928. FARM VALLES.

In the present slump affecting New Zealand it is rather remarkable that land values should he affected as seriously as they are. particularly in the North Island where there has been such a notable increase in production and returns. This matter was referred to by the President of the Auckland Savings Bank, who in referring to theHinprovement in the financial position of New Zealand, said there lias been no resultant demand for farm property, and buyers generally appear to he taking a conservative view of values. It would ho futile. said the speaker, to attempt to survey the manifold causes of the slump in farm—chiefly dairy farmproperty values. No doubt, in many instances, failures were directly due to extravagant prices having been paid, the most hopeless cases being these where men not only paid an unduly high price far their farms, but their purchase included more laud than they could possibly develop with the limited means at their disposal. Much cf this unused land is of very high quality.

and still remains highly undeveloped. It is situated within easily accessible and wcll-ro-ade.il districts, and if the way to prosperity is to he more speedily traversed, one might suggest, In passing, 'that it would appear to bo wiser to devote our energies in the promotion of these potentially rich areas rather than in the consideration of propositions for opening up poorer lands in the backhloeks, especially as the. latter work will certainly be accompanied by insistent demands for heavy public expenditure. In view of experience gained since the war, one might, I think, ho justified in emphatically expressing the opinion that if our primary industries—upon which rests the main structure of Dominion finance and Dominion credit-are to be maintained and l properly developed, it is imperative that rural finance should be associated with conservative advances. There certainly can be no iDnnanenb alliance between inflated land valuations and cheap money, whether the money is to he supplied by the State or by the individual. During the period through which wo are now passing, ‘broad acres,’ as a security, have Inst their old-time popularity . This has been caused partly by the losses mortgagees have experienced. owing to the tall of land values and because these particular losses have been associated with tho realisation that the value of a farm security depends largely upon the personal elmont. It will be agreed that the State cannot he expected to accept the responsibility of finding tho enormous sums required to finance the purchase and development of the agricultural and pastoral lands ■:>! the Dominion. It is evident, therefore, that the bulk of producers must continue to rely in a great measure on the private investors, and also that farm mortgages cannot at present' successfully compete against other classes of investments returning attractive rates of interest. Under the circumstances there would appear to lie some reason in the suggestion that a practical way of mooting a trouble—which shows every sign of getting worse rather than tetter—would be found by the removal, or partial removal, nl taxation on income derived Imm loans on agricultural or pastoral lands, either fully developed or in the process of active development,” remarked Mr Anderson, the President. “If some concession of this sort were made, and land valuations and the actual productive reason were more in accord, there is reason to believe that ‘broad acres’ would regain their old-time popularity. The marked deflation in the values of certain classes of farming lands, and the reasons therefore should lint lie overlooked by investors io the towns and cities, where in many instances. valuations are cheerfully made and accepted on the basis of the last sale price, or on ‘what the man down the Street is asking’ If productive Value is being regarded as the main factor in the valuation ef a farm or a eomtncrehil investment,, it should certainly continue to be an important factor in the assessment of the value of n town nr suburban section. This hank does not make mortgage advances on hare sections, or allotments, but this is a reference to the matter in a general way, because there is . more than an indication that the prosperity of the country is being retarded by abnormally liigli rentals, which are the . direct result of high land values, heavy taxation, and high building costs.”