8.—5.

30

[a. seifert.

But even if. they met one-third of it, it must affect the big companies. How do mortgage rates here compare with those in Australia \ —A while ago it was said that they were lending there at 7 per cent., and then I saw that the Commonwealth Bank was lending at 6 per cent. But do not the rates vary in different parts of New Zealand ? —No; the A.M.P. rates in Southland and Auckland are about the same. What is the current rate in the North Island ? —For local bodies, about 6 per cent. But for a mortgage ? —I could not tell you, but it is about 6-| per cent., I think. On the best security they certainly vary considerably within New Zealand ? —They certainly are lowest in Dunedin. Mr. Shirtcliffe.] Mr. Begg asked you, Mr. Seifert, whether you thought the lending companies fixed the rate of interest. You do not think, Mr. Seifert, that money is a commodity like everything else and its price is ruled by the economic laws of supply and demand ?—Not altogether, because if you take off some of this taxation after giving a special rate for years back the law of supply and demand does count, but when anything happens to influence it the rate will rise in sympathy with it. In spite, of the fact that there may be plenty of money about ? —lt depends upon that —that there is plenty of money at one time and not much at another. It is difficult to see how any concern can fix the rate of interest when it is in competition with similar concerns right throughout the country. The price of money must find its level, according to the supply of money in relation to the demand for it ? —You would have thought that the heavy charge for operating could not have any effect, but putting ss. lOd. in the pound on will eventually make that difference. "Whatever charge is put on will be reflected. Mr. Hunt.] In your statement, Mr. Seifert, you talk of industries being crushed by taxation. Do you refer to an industry that cannot pass on that taxation % —Yes, I mean that. I have made that clear at the start. In your own industry —flax-milling —your price is fixed by the export price which is the world's price, and you cannot pass it on ? —That is so. All these other companies which Mr. Shirtcliffe mentioned are partly local companies and are passing it on I —Well, some of them. Dalgety's have a large amount in Australia. But the great bulk of them are New Zealand companies dealing with a local trade ? —Yes. And they can pass it on ? —I should say so —by those dividends. And the fact that they arc paying these dividends is proof that they are passing it on ?—Yes. Mr. Weston.] Can you give me any idea of the rise in value of flax land between. 1914 and 1920 ? —There is a good deal of difference in the value. It was lower in 1923 than in 1914. Because of this disease. Between 1914 and 1920 the value of flax land went up very much. What would you say the rise was equal to —can you give me any evidence on that point ? —lt is very difficult, but I should say at least 25 per cent. It would be something about the same as the purchasing-power of money. £600 would purchase as much land in 1914 as could be purchased for £1,000 in 1920. You would not say that there was a great rise in the value of land ? —Not taking the lower purchasing-power of money. You have not got any actual figure*—what about the price per acre ? —About £50 for flax land. What would you pay for that in 1914 —£20 per acre ? —No chance, ; it would be £35. Whether an industry could survive or not would depend upon what you valued the land at from which you produced the flax ? —Not necessarily, because if a company is allowed to lay by considerable reserves and has its own flax, as we have, it is in a very good position. That is the ideal state which all business men aim at —to have all their assets written down to practically nothing. But the point lam making is this : supposing you had land that had cost you £30 per acre, you might be able to stand taxation and keep on producing at a profit so long as you only valued your land at £30 an acre, but if you valued your land at £50 an acre you would have to get a greater amount of profit I—Yes,1 —Yes, a greater amount of profit. So it does not necessarily follow that this taxation would throw you out of existence, because it might be met by simply reducing the value ? —lf you were prevented from working your flax economically in a large way, and supposing you were not able to work it in a small way, then you could sell the land for dairying. And, mind you, the taxation has already had that effect. If you own your own flax and mill —and it is not wise to carry on milling without —you must have a fair amount of capital, and therefore you must have some years when your balance-sheet would show a fairly substantial profit. If that is taken away and the dairy-farmer gets off free, he can use that land for a purpose that will not be so productive and pay a great deal more money for it than it is worth to you. I think that could be done in our case to-day. In fact, I was prepared to do that if the high taxation had continued. I had roads marked out on the land. I could sec it would be hopeless for us to continue, although, mind you, we had been paying as much as £15 an acre in wages. I mention that to show what the turnover is to the country. It is an exceptionally good farm that will yield 150 lb. of butterfat per acre. If you take 100 lb. of butterfat, that is £7 10s. per aero. We were paying more away in wages than would be the receipts on a dairy farm, and yet we were in grave danger. Had that high taxation continued I should have been compelled to put that land into dairying. Mr. Shirtcliffe.] But now, as regards income-tax, you have, ho grievance at all ? —Well, gentlemen, you are here to make suggestions, and if you suggested putting that load on again, which you might do, it would put me back in the same position. Mr. Weston.] You justify small taxation in your case ; you say that your industry cannot afford to pay a graduated land-tax and be subject to a progressive income-tax ? —No, we cannot.