The Auckland Star: WITH WHICH ARE INCORPORATED The Evening News, Morning News and The Echo. FRIDAY, JUNE 18, 1926. FINANCE AND THE LAND.

Auckland Star, Volume LVII, Issue 143, 18 June 1926, Page 6

The Auckland Star: WITH WHICH ARE INCORPORATED The Evening News, Morning News and The Echo.

FRIDAY, JUNE 18, 1926. FINANCE AND THE LAND.

■ i For the cause that lacks assistance, For the wrong that needs resistance, For the future in the distance, ; And the good that we can do. !

I I Primary industries in the Dominion ! have not progressed with the vigour that is necessary to combat the fall in prices, i with the result that this year the export I returns for the seven months from , ' October 1 to April 30 disclose a decrease of £8,830,556 as compared with the game period of 1925. To some extent this is due to business difficulties on farm | and station, landholders finding it j impossible to arrange satisfactory finance | with the banks, owing to currency j scarcity, to the cautious policy neces- j sarily adopted by the banks, and to high j taxation making cheap money available only through State channels. These ; difficulties restricted production, farmers ; being unable to make the best use of their land when financial accommodation : cannot readily be obtained. j The new scheme propounded by the , Bank of New Zealandf and outlined in | another column, promises to do a good j deal to relieve the pressure upon the agriculturist. It is proposed to increase ! the capital of the Bank for the special | purpose of raising funds for loans on j the amortisation principle, extending over a long period, with repayment of principal and interest in half-yearly • i instalments. The Bank seeks authority I to raise £1,400,250 of new capital for this service, and to borrow against this and i the securities accepted debentures to the j amount of three times the additional , capital, thus making over live millions available for loans to farmers. I Under the existing income tax | charges it is impossible for either banks i or big financial companies to lend money even upon mortgage at less that 8 per cent, a ruinous rate for the borrower , but, when the tax of 4/0 in the pound is subtracted, leaving the lender only 0.4 I per cent. That rate can only be j accepted, in the light of past experience, j I upon a wide margin, and when stock ] or produce, not land, is the security the ] limitations are still more strict. As a result there has been great restriction of i land transactions and still greater restriction upon the purchase of stock. Farmers have found it impossible to dispose of their properties, and many j have had to walk off, forfeiting every - i thing, or have hung on desperately, I unable through lack of funds to do more than mark time. With five millions available at a low rate of interest, for it is part of the 6cheme that no income taxation is to be paid, a limitation of dividend being accepted as a counterpoise, it will be possible to restore financial stability to large numbers of properties, and by arranging definite financial assistance over a period of years, to make these profitable to the owners or available for transfer to others upon a reasonable financial basis. It is quite obvious that the scheme will be of immediace beneiit to the j ' bank itself, enabling it to make satis- I • i I factory terms with some of those to whom advances have been made on overdraft in the past, and who do not find re- i payment easy. Under the lower stale of interest, but quite apart from this, the ' new proposal, judiciously used." will > offer great benefit to the whole agri- j i cultural and pastoral industry, and it j merits warm aproval as an earnest and solidly founded attempt to assist the sorely harassed producers of the j Dominion. The suggestion may be made that the bank is getting in ahead of tlie rural credit bank scheme, upon i which the travelling commissioners will' soon report. Well, the bank is a busi- j ness institution, and has the right to ( protect its own interests, but in any | event there, will be room for both, and the proposal now outlined is for immediate -use when it is badly neededr not for some future period when the time of trial may have passed.