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Hokitika Guardian, 6 December 1930, Page 4

AATpu the steep drop in prices for both wool and dairy produce, the man on the land who is pursuing sheep farming or dairying, or both, is in a very clirueult position, in most cases it can bo mi id that the settler’s income has been reduced by more than ball, in iso mo cases probably two-thirds. If by the inexorable law of supply and demand all incomes would be so reduced the plight would indeed lie serious, aild CUnsecjlicittly there cail be a good deal, of sympathy with the farmer aitd his difficult lot. 11l the circumstances, many of the fa drums’ organisations are seeking Government assistance to declare a moratorium, The effect of such action would be to create a legalised right to postpone the payment of a debt after it, otherwise, would fall due. This was the condition of affairs at the outbreak of the Great War, when a moratorium was created in Great Britain, and later was adopted by this Dominion and many other countries for a period. The effect of the moratorium is to raise interest payments on past accommodation sought. Ihe lendei naturally seeks for better security if hie cover is to be in any doubt, and at the same time less money is advanced on a security by the lender taking more margin so as to assure his position the better. The borrower will | therefore find it difficult to raise money, excepting 'on a higher rate of interest and for a lesser sum advanced. The money becomes dearer and scarcer. and the difficulty in securing accommodation dislocates ordinary credit .also, and ieopardises the general position considerably. The moratorium, while it gives temporary help for the time being, carrier other and perhaps more costly burdens in its tram, and in substance is hardly a blessing in the disguise it takes. Financial authorities familiar with the effect of the prevous moratorium period, aie rather averse to the proposal as a real solution of the troubles Of todtiy and their opinion is worth something. The lender at present may foreeloSe on his security if his payments are not met, but with the general state of prices, that is not a politic act unimbi he has a wide margin in security value, as his difficulty would ibe to find a fresh buyer at a satisfactory price. The effect of loca circumstances will settle most cases on their merits. The borrower who has played the game in good tinms vi not have much to fear in the uU times, for the circumstance of general finance to-day are such that there must be a spirit of give and take to help the temporarily needy. The portion is naturally very difficult tor many, and it is an unusual one also. Whether circumstances will isoon chano-e, while not immediately pronusiucr give the iroorem that commodity prices being so low, any change now must be largely for the better and so Pf>ln to retrieve gradually the genera situation.