CORRESPONDENCE.
FARMERS AND FINANCE. (To the Editor.) 1 Sir, —It is with Interest that one notes in your columns of late the various suggestions and proposals that, have been made with a view to meeting the difficulty most farmers are experiencing in paying the interest on their mortgages and loans, as a result of the unprecedented slump in agricultural produce. Mr. Massey, recognising the gravity of the position, has despatched an officer ,to the Waikato,district to act as arbitrator in bringing about a settlement between farmers and mortgagees where the latter are willing to negotiate. . Thus, in these cases, the present high land, values will be reduced to reasonable productive values. . Then, again,. one reads of.’a’ ease In the jiawpra district where the mortgagee has agreed to accept payment of interest on a sliding, scale, according to prices being realised for produce. These two methods of dealing with the situation seem fair enough, and, in effect, practically amount to the same thing. There has also been much talk in the House, of Government assistance to dairy farmers,-and I note that one of your correspondents even goes as far as to suggest that farmers who are in difficulty Should -be given a clean sheet for a season or two ite a means of encouragement. All these suggestions are very good as frir as they go, but they are not comprehensive enough, and the two last mentioned proposals seem to be based on the assumption- that the prices advanced on butter-fat will again rise to .the vicinity of ; those paid last season. The general opinion amongst farmers and business men is that butter-fat will eventually harden to fourteen or fifteen pence per pound. Such proposals, therefore, can only be temporary expedients at best, and resemble an attempt at healing the sore froih the top instead of getting at the root of the evil, which is in the blood itself.
Mortgagees are not all big bloated capitalists. They are, for the most part, small men who have worked hard all their lives, and who have invested their small savings in land mortgages; and it is on the Interest of these mortgages that they depend for their old age. I* Is therefore grossly unfair to ask them to come to reduced terms if the mercantile Arens are not prepared to do likewise. Similarly, it would be unjust to expect firms such as tte Loan and Mercantile, Dalgety's, and Newton King, Ltd., to write down the amounts of loans on stock, implements, etc., if the banks, which are behind the firms, are not prepared to do likewise. That the banks can afford to bear their portion of the sacrifice there can be no doubt when we consider the enormous profits they have made 'during recent years. Take the Bank of New Zealand, for instance. For the period ended September 30 last, this bank cnade a net profit of over £300,000.' It will be remembered also that this bank, for the period ended March 31 last, after declaring a very substantial dividend, was able to make a free gift of some £200,000 to. its shareholders as additional share capital. While on this point. Sir, I shall esteem it a favor if you would Inform me as to whether this method of disposing of huge profits Tenders such profits immune from income tax,—(No. Ed.)
It is worthy of note that these tremendous profits were made in the face of this big slump. The sheep farmers are in the same predicament as the dairy farmers. Admittedly, the prices being paid for wool are hardening, and onutton is going up, but during the last two adverse seasons many sheep farmers have sustained heavy losses of capital which they may never recover, and they have incurred debts which they will never pay. It is therefore feared that many sheep farmers will not benefit by the revival In the meat and wool markets. Even those whose financial positions were comparatively strong are now eating up capital. Some townspeople maintain that if the farmers are in difficulty now It is their own faults, that the farmers should have taken advantage of the unprecedented high prices which they received during and immediately after the war, and saved up In order to face hard times that were bound to follow. But they fail to realise that during and after the war the cost of production, the amounts of land and income tax, rates, and the cost of living, all rose out of proportion, and most farmers are worse off to-day than in 1914. Clearly, then, the difficulties now being experienced by nearly all farmers are the outcome of circumstances over which they hare no control. Delegates representing different farmers’ organisations have waited on Mr. Massey with the object of obtaining Government assistance in various ways, but it is certain that a Government run on commercial lines for commercial gain can do very little in the matter. Mr. Massey is busy with his own problems, chief aunong which is tte payment of the Interest on our huge war debt, but he Is doing his best. It is therefore up to the farmers to help him by helping themselves out of the difficulty, instead of going to him to be nursed. The farmers hold the remedy in their own hands, and, moreover, they possess the power to carry that remedy into effect, if they would but realise it. Now. sir, the bulk of New Zealand’s national wealth issues from the land. It therefore follows that the bulk of our national income finds its source in the land. Thus it becomes more and more apparent as days go on that something will have to be done to relieve the present situation. The objects of Lord Northcliffe’s recent mission to New Zealand are two-fold—(1) To take stock of the country for immigration purnoses, and (2) to see if English capital sunk in this colony is safe. For the purpose of the matter under discussion, we are concerned only with the latter. What his real opinion is we can only guess, but it is certain that if many farmers are to be driven off the land, New Zealand will have a pitiful tale to tell the London financiers ere long. In getting down to hard facts. Sir, it seems that the settlement of the problem rests almost entirely with the banking amalgamations of New Zealand. Now, it. will be remembered that many years ago, when this
country witnessed a great financial . crisis, the Government (i.e., the people) saved the Bank of New Zealand from ruin. Here is a great opportunity then for that bank to show It appreciation by saving tte people. That, Sir, is what I call real patriotism. The remedy I suggest is as follows: —AH farmers should meet at their district centres with, a view to ascertaining the real position of those who are in difficulty. They should eledt committees, each of which will be given definite district boundaries within which to operate. The members will canvass the districts and interview every farmer, who will be frank and lay all his cards on the table. (There is no disgrace attached to bankruptcy in times of national stress.) Then, if the general position of the farmers warrant it, each district committee should elect a delegate to/ represent it at a conference of district committees and all banks and firms concerned. The object of this conference would be to bring about, an equitable settlement between all money-lenders and all farmers. If farmers act individually they will have to depend more or less on charity, which Is a very scarce commodity nowadays. We do not want charity, but justice, and farmers can only obtain justice by joint action. The reduction of high land and stock values to reasonable productive values can only be fair if it is universal. Not until then will the cost of production, the high cost of living, and our inflated currency return to pre-war level. I am sure the farmers will realise the necessity for joint action, for there is a natural tendency amongst men when they are In trouble to meet together and render mutual aid. Every village has its hall committee, its sports committeee and Its school committee, and, in some cases, its co-operative factory board of directors, so why not its "Farmers’ Outlook Committee."? Such bodies, if universally established, would form the nuclei of a powerful fann’ers’ organisation, which is badly needed In the country to-day to deal with such problems as those arising from the ravages of elemental calamities, fire-blight, noxious weeds, internal and external parasites and superfluous middlemen. Hoping to see more suggestions advanced by someone more conversant with, the matter than I am, and thanking you for your valuable, space,—l am, etc., PASPALLUM.
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Taranaki Daily News, 27 February 1922, Page 2
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1,464CORRESPONDENCE. Taranaki Daily News, 27 February 1922, Page 2
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