The Daily News. SATURDAY, MARCH 12, 1921. THE MORATORIUM.

Taranaki Daily News, 12 March 1921, Page 4

The Daily News. SATURDAY, MARCH 12, 1921. THE MORATORIUM.

When discussing the serious position that has arisen in consequence of 4he fall in stock prices, at the meeting of the Farmers’ Union at Wanganui on Wednesday, the need for au extension of the Moratorium was strongly stressed, it being contended that that was the only means whereby the position could be saved, and a resolution requesting the Government to take steps to protect farmers from “arbitrary calls by financial institutions by an extension of the Moratorium, or otherwise,” was passed. It would seem that already Mr. Massey : as shown in his reply to Mr. W. H. Field, M.P., arranged to deal with this matter, the necessary legislation for the purpose having already been drafted. State interference with the usual transactions between lenders and borrowers can only be justified under circumstances of exceptional gravity, or in face of a crisis that is charged with the elements of disaster; and even then it is a matter for serious consideration, especially if the protection sought for is restricted to some particular or industries. As a protective measure to meet the acute situation caused by the war, the Moratorium Act was needed to prevent a financial panic that would have ensued if lenders of money had arbitrarily used their powers of foreclosure in order to reap a rich harvest, a process that would have caused disastrous consequences to mortgagors, and probably ruined the main industries on which the financial strength and prosperity of the country depends. The Act was justified, and it attained the purpose for which it was designed. Owing to the purchase by the Imperial Government of the Dominion’s primary products, and the high prices received by the producers, the price, of land rapidly rose, and during the the boom reached a height much above its real productive worth, though at the then price of farming products and byproducts there was, by the exercise of labor, care, economy and intense methods, a margin of profit. Warning and warning was proclaimed by financial experts and economists at the probability of a fall in prices, but speculation and the competition caused by the Government financing ex-soldiers taking up highly improved land accentuated the already inflated values. The expected has happened. With the one exception of dairying products, there has been such | a fall in prices of commodities

connected with fanning that several are lower than before the war, while taxation and local rates are oppressively high. It takes no stretch of imagination to envisage the possible outcome of a state of affairs that is adversely working at both ends. At the same Lime, it has to be remembered that the farming industry, in common with all other activities dependent on market prices, has to accept the law of averages, and take the lean years well as the fat. The chief consideration, 'however, is the effect this slump in prices may have on the community generally and on the economic stability of the Dominion. The Moratorium has not prevented rates of interest rising. The problem the Government has to consider is whether the outlook in connection with the Dominion’s primary industries is of such a serious nature as to justify the extension of the Moratorium. An important factor in the decision is the effect such an extension may have on the credit of the Dominion, and on the lending institutions. On the other hand, it is the duty of the Government to afford the necessary protection to soldier settlers from financial pressure that might prove disastrous; but the same cannot be said of those who took advantage of the Moratorium to further their own ends when they could easily have met their engagements; or of the speculators who took up land at inflated prices. There are many points requiring serious consideration in connection with extending the Moratorium, and the Government will require to exercise great caution in continuing a war measure. The only safe and sound, course to take is to ensure the greatest good for the largest number, and to avoid creating a precedent that may result in inflicting more harm than good.