WELLINGTON NEWS

Hokitika Guardian, 18 September 1928, Page 4

WELLINGTON NEWS

RETROSPECT AND PROSPECT. (Special to •• Guardian.") WELLINGTON, Sept. 18. Messrs Pyno, Gould, Guinness, Ltd. issue each year a review of the past season, and this Annual Review is invariably interesting and largely instructive. Dealing with production tho Review declares that the country lias far to go before reaching its peak load, but the improvement made in recent years is one to be proud of. Compared with 1907-16 period, last year’s return gave an increase for the season of 33 million pounds of wool, 640,000 cwt of frozen meat and over 2 million cWt of dairy produce. For tho year ended June 1928 the increase in export values was due to an increased volume estimated at 7.7 per cent and to a rise in prices, averaging about 11$ per cent. The-Review makes some sensible remarks on the cost of production. It is admitted that a good deal has been dono to lighten the disabilities suffered by agricultural and pastoral interests. “ Once our politicians recognise the necessity for a proportionately equal basis for town nnd country workers (observes the firm) a means of reducing production costs should bo possible, and thereafter every section of society should speedily improvo its condition. Until cheaper living under comfortable conditions is possible we do not think any permanent benefit, particularly to the married man with a. family, can he reached. Dependent as this country is on tho world’s prices for its exports it is impossible to permanently hold local production and service costs at artificial values.” On the. other hand it is well to hear in mind that wo cannot hope to compete in the world’s markets unless we buy our requirements and our public utility and other services under favourable conditions. With respect to agricultural research the opinion is expressed that farmers’ organisations ns a whole should take a more active interest in research work now being carried out and publish their appreciation or criticism of what is being undertaken primarily in their interest, hut actually for the benefit of the whole community. Results show that profitable farming is possible on a basis considered impracticable before science and the laboratory came to the farmers’ aid. Many farmers are still inclined to scoff a 1 these new-fangled notions, but the majority realise what is possible. The Review deals at some length with Rural Credits. It is not thought that farmers or wheat-growers in the Canterbury province will finance under the Rural Intermediate credit but it is a fact that many farmers forget that interest rates must be ruled by the abundance or shortage of loanable capital, and that supply and demand rule the interest price both for deposits and overdrafts. The difficulty in the past has been that cheaper rates on farm mortgages have ted to increased land values followed by boom years, and the subsequent inevitable slump, which caused such widespread distress. “We still hold the opinion (says the Review) that a loan on good freehold land in New Zealand, valued on a sound pro--duction basis, is tho best investment ol its people.” This, of course, is the opinion of a firm of stock and station agents, but investors in Stock Exchange securities hold different views. Many investors have made huge profits not by speculation but through the appreciation of tho shares held. The firm state that “In spite df the recommendation of the. Rural Credit Commission, we think our farmers would be well advised to ask for amending legislation, something on the lines of the charters granted to tho Joint Stock Land Banks in America. This would enable amortised farm loans to be safely made from existing sources of the present three and five-year mortgage loans. A prompt means to restore investors’ confidence in farm loans appears essential, for it is freely admitted that private moneys have largely of recent years been transferred from farm loan securities to local body loans and other investments.” Further on it is pointed out that tho effect of the inflation ol' farm values Urn-ini' tile boom was still apparent during the past year, when numerous properties had to be realised by the mort-gagees-—often at a loss on the amount originally loaned. This has led to valuations based on a closer relation to actual production values and a tendency to demand wider margins of security when new loans are negotiated.