GET DOWN TO VALUES

Rotorua Morning Post, Volume 2, Issue 391, 28 November 1932, Page 4

GET DOWN TO VALUES

The Prime Minister has declared with an emphasis that suggests a new idea, that interest must be reduced. What he means is that the annual cost of bonds is too heavy and that re- i lief must be given in this quarter if a substantial deficieney is to be escaped. The only kind of repudiation which meets with official condemnation to-day is that which injures our credit abroad — it is purely a business distinction. Mr. Forbes is deeply concerned at the moment with the farmer's troubles, but he does not to any very evident extent advocate the reduction of the producer's interest bill. The cause for this is probably national, but the problem of the indiviclual must be solved before we can bring about the sal-

vation of the country. It is useless to. say we must do this or that to balance the Budget, irrespective of the eifect it has on industry. It is concgivable that the interest bill of the farmers is anything from 30 to 50 per cent. above normal, »by which we mean not to-day's level, but that at which it may eventually be stabilised. Mortgage interest is based on valuations that could never have been justified even in years of greatest prosperity, and it is little wonder that so many of those who are carrying an insupportable burden make no attempt to pay. The effect of this is that the debt is accumulating, and in the long run these men will be so hopelessly | involved that they will have to abandon their farms. Other s are convinced that they must meet their obligations as they come, and this restricts the operations on the farm. It is impossible to do anything to make secure the . position of some who purchased unwisely without writing off practically the whole capital j cost; the majority can be put in i a fairly sound position by a rejvision of land values, the prin- | ciple being laid down that farms | are worth only what they will | return in production, and are j not value for £40 to £50 per acre j simply because that amount has ,been invested in them by setjtlers who listened to the voice j of the charmer during the period when speculation was rife. What is the use of carrying on this solemn farce of sustaining inflated values of land? Let us get down to realities, for that is the only foundation on which ; solid prosperity may be based.

During the Reform regime from £8,000,000 to £10,000,000 was written off the capital cost of soldiers' settlement lands, and ten times that amount could now be written off private holdings without the asset being unduly depreciated. It is no use saying what is fair and what is not fair in this regard — the only test is that which measures with the yardstick of productiyity, for land is not in any way different from other commodities which are priced according to the infallible principles of supply and demand. Those who advocate a high exchange and other measures designed to raise prices artificially, regard the townsman as a natural enemy but a considerable part of the trouble from which we are suffering was caused through the application of such measures as are now suggested — moratoria, bounties and bonuses, quotas, price fixation,' and everything else that will give the farmer's produce a value to which economic conditions djbi not entitle it. When we have faced realities and established the farming eommunity on ,a new level where it may begin to win it& way back to prosperity, it may be possible t.o stimulate progress by measures justified by increased industrial development, and we are not far behind that point if the matter 6f h.astening recoyery is taken up in