LAND AT BOOM PRICES.

Taranaki Daily News, 27 March 1922, Page 7

LAND AT BOOM PRICES.

FARMERS’ TROUBLES. SHOULD STAMP DUTY BE REMITTED? SOME INTERESTING STATEMENTS. (From Our Own Correspondent.) Wellington, March 24. The financial troubles of some farmers who bought land at boom, prices were discussed by the Dominion Executive of the Farmers’/Union yesterday. The question was raised by a suggestion that when original owners had to resume possession of properties, they should not be required to pay stamp' duty. The Executive thought that relief of this kind was not justified. The Southern Hawke’s Bay branch had asked the executive to consider the hardship that arose when original owners had to take back their farms owing to the new owners being unable to carry on. “In many cases,” said the branch, “the vendors have not received for some time the interest due to them' and even in some instances have helped the holders financially. But before the farm can be passed over to the original owner he has to find the stamp duty, etc., just as if he were making a purchase in the ordinary way.” Mr. H. Morrison (Masterton) said that in most of these cases the original owners had sold out at very high prices and the buyers could not carry on owing to the slump. He did not think that any action was required. Mr. J. H. Jull (Hastings) thought it most unjust that stamp duty should have to be paid in cases of the kind, and this view was supported warmly by Captain Colbeck (Auckland), who said that in some instances the Government had already collected stamp duty half a dozen times on the same properties during the last few years.

Mr. Morrison: The original owners got a good deal of cash down and they are doing pretty well. It is the poor fellow who is going out that suffers. Captain Colbeck: I sold three properties without taking any cash at all. Where do I stand now, with B£d being paid for butter fat? The chairman (Mr. W. J. Polson): We are getting Is in our district. Captain Colbeck: We are getting BJd and in one case they are only getting sd. The men are walking off their farms. It is essential that something should be done. If one man goes down he will drag many others with him. He said that some of the properties were carrying several mortgages. The holders "of the 4th and sth mortgages admitted that under the changed conditions they had no interest to realise. They had lost their money. The properties went back into the hands of the men who had sold at reasonable prices and then the Government demanded stamp duty. Members of the Executive declared in a good many cases the original owners had received fairly large deposits and were now resuming possession of the properties under quite advantageous conditions. The Government in any case ought not to encourage foreclosures. Captain Colbeck: If you turn this down you are &oing to kill the Farmers' Union in Auckland. They will say that you are talking no interest in their troubles. This is a most urgent matter and if these difficulties are not dealt with promptly I don’t know what is going to happen. If one man falls he will take many others with him. Mr. W. P. Mathieson (Eketahuna): The remission of stamp duty will not stop that. Captain Colbeck retorted that 30s in the £1 was a big item. Mr. R. Dunn (Taranaki) said that some of the dairy farms carried six mortgages each. The property might fall from one mortgagee to the other and the Government might take stamp duty each time. Mr., Jull said that he could quote a case of hardship. He knew a man who had been worth £20,000 two years ago and was now working at a trade for wages. The man had bought a farm during the war years, sold it at a good price, bought another farm and sold that one also. He was in a good position till the slump came. Then both the farms were thrown back on his hands. The money that had been made out of the transactions had been spent. He had either to take back both the farms or else see them sold and become liable for any deficiency created by the sales. If he took the farms back he must pay stamp duty. Many other people were in the same position. Captain Colbeck: There are thousands of them.

Mr. Morrison said that in many eases the original owner had received a good deposit and held a first mortgage. Such men could resume possession now on, favorable terms and the remission of stamp duty would be an inducement to them to do so. The real sufferers were the men who were being squeezed out. Mr. Mathieson said there could be no injustice in the administration of the law under which the bargains had been made. There was much more to be said for assisting the man who was •failing than for giving relief to the mortgagee who Was recovering possession of the land. Mr. R. Duxfield (Horotiu) said the Farmers’ Union was doing nothing for the dairy farmers at present. A rival organisation was professing to do a great deal for them. He did not say that the Union .could do anything. H§ did not see what coul be done, but he thought a conference might be arranged for the discussion of the difficulties. Members: That is anbther question.

Mr. C. L. Marshall (Marton): It is suggested that a law should be passed to make it compulsory for interest to be added to the principal for a year. Mr. Chadwick said the fact was that when times were good most of the farmers were busy selling out and gambling in land. Now the slump had come and times were changed. It was very ■unfortunate, but he did not see that the 'Union could approach the Government in the matter. He had in mind the case of a man who sold his farm at a high price on a £3OOO deposit and then sold his stock at top prices. Now the man had the farm back in his hands. He held the .£3OOO and he was restocking at slump prices. He was making a big profit.

The chairman said he knew of a similar case on a large scale. He did not think anything could be done except by mutual consent of the parties. The Government had appointed a commissioner who might be able to do something. The matter after all was one of business. It would be a mistake in. many cases to attempt to bolster up men who had bought land in the boom years at very high prices on very small "deposits. These men could not get rid of their load of debt otherwise than by getting out. It was better for them to make a fresh

Mr. Morrison: There are cases of men who will pull through if they are given a little time.

The chairman did not, think that any man who had a chance would be pushed out. But there could not be any compulsory intereference with the financial arrangements that had been made by the parties. Men who bought land had to accept the risks. Many of the farmers had known that land was far too dear. But they had invested, or rather gambled, in land and now that things had gone against them they must grin and bear it. Mr. Mathieson njoved that while the executive knew that hardship was arising in some cases, it realised that the chief hardship generally fell upon the man who went out, and it did not see any sufficient reason for asking fdr an i alteration of the law regarding the I stamp duty. He thought that facts had to be faced. “We are sick for want of discipline,” he remarked. The motion was carried, Captain Colbeck and Mr. Duxfield dissenting. “It is the most cruel thing you have done for many a day,” said Captain Colbeck.

The Executive decided to ask the Commissioner of Taxes for a statement as to his power to remit in cases of hardship.