The Guardian And Evening Star, with which is incorporated the West Coast Times. MONDAY, DECEMBER 29, 1930. VALUES.

Hokitika Guardian, 29 December 1930, Page 4

The Guardian And Evening Star, with which is incorporated the West Coast Times. MONDAY, DECEMBER 29, 1930. VALUES.

Forck of circumstances at present is causing a readjustment of values. Lliis applies to most things, and it is inevitably so. Values after all are equal to their production. From time to time their is a drop reported on securities. This is due not to the property itself which remains the same, but to the production and the interest it can return. Dank shares arc not what they were, neither are insurance, or many' other kinds of similar stock. Some industrial stocks due to the falling off of business, have declined to a negligible value. The same is happening with land. The costly frontages in great cities are falling rapidly. In many cases it is sa,ia they are down one half. So with rents in the Large centres where the building booms concurrent with the wave of prosperity for commodities, built many palatial places. There are many instances where these huge places are not giving a return for the capital invested. There was a craze some three years ago for small shops, but the business is not to be done, and many empty places are resulting, while in other instances the rents have had to tumble down. So with farming lands. The former prices paid are not realisable now. There is a heavy drop in the former dear land of as much as two-thirds in some instances. This decline of values carries heavy losses to those who are involved, and there is< not any hope of retrieving the position. The solvency of large companies involved in advances on dear lands is now a matter for serious concern for the managements. The usual dividends to shareholders are not payable to begin with, for not only have profits declined, but results must be strengthened; to meet the situation caused by the levelling down of commodity prices. Sheep farming country i,s affected very erectly at this juncture, both in respect to the price of wool, and the value of the surplus stock going on the weekly markets. Returns are falling heavily, and whore advances are involved and interest payments have to bo met, the farmer has a

very present difficulty in front of him. It would be hard to value such an area of land at the present. It would not be fairly saleable at the moment which is the best test of values, and in (such circumstances securities must he written down. The general condition of declining values means a halt in advances of any moment. Buying and selling have come practically to a standstill and this is a serious aspect of the general situation. There are no speculative values at present, for there are no buyers in sight to buy for a irise, and the result is a degree Of stagnation which reflects itself in various ways. There will be inevitably an adjustment of values, as the occupiers of mortgaged land cannot pay in the end, more than the land will produce. It is because of these obvious facts that there is such a, definite organisation on behalf of the farmers for some national adjustment of the present situation. The demand for the moratorium is insistent, but. so far the Government lias turned a deaf ear. It is admitber however, that the Crown holds about half the mortgages in the Dominion, and the Minister has indicated that a system to afford relief will be devised. The country is of course behind the Crown, and any adjustment will not have the same effect us with companies or organisations so involved. In the latter case it is the individual shareholders who have to hear tbs burden directly, and the personal loss is felt indirectly over the community. The general situation calls for caution and patience in handling a very difficult and unfortunately a rather general position. This general condition where individuals are going to be affected persona 11 v will have the most direct effect on the whole question of prices. With reduced incomes trade must decline, or to encourage it, prices must drop to meet reduced incomes. Incomes whether earned from business, or salaries, or wages, will be in the same category, and no laws of man can control thp oosition. There will be the all round levelling down, and a readjustment of the [standard of living and the price paid for it. This will not come, ‘to pass quickly, and that is a reason why the whole matter should be handled circumspectly to avoid anything in the nature of a national disaster.