FARM FINANCE.

Auckland Star, Volume LVII, Issue 208, 2 September 1926, Page 20

FARM FINANCE.

(To the Editor.) Sir,—To-day, with the high prices of. land, implements, stock aud general living, farming is not as profitable as formerly, and the slump in trade has not helped matters. The farms, with their varied produce, supply 95 per cent of this country's exports, and those who work them therefore deserve consideration from all sections of the community. We city dwellers are too prone to regard the farmer as a country simpleton, who Glogs away on his farm, struggling to pay his interest, etc., and spends his surplus cash iv the, city. There our interest in him ends. Farmers to-day need large capital to run their farms efficiently, and when, they lack necessary capital they are impelled to borrow money on mortgage. The mortgage debt of this Dominion is nearly £270,000,000, and of this enormous amount the debt secured on farm properties is £140,000,000 —involving an annual interest expenditure of roughly £8,500,000. Fully 50 per cent of the farm mortgagee represent loans by private investors, aud consequently are for the usual three or fiveyear term, which loans require renewal or re-arrangement at the expiry of such terras. It is foolish for any farmer to Arrange a loan for three or five years when lie knows he cannot possibly repay it, but suck it our method of rural finance that he is forced to avail himself of the ruling practie*. It is hoped the Bank of New Zealand scheme will give a lead in the matter of longer-term loans and lower interest. Our financial institutions have not assisted the farming community in the manner one would expect them to, and it is time more sympathy was given to the claims of the farmers on the financial reserves of this country. The average private investor to-day avoids a proffered farm security as he would a nauseous odour, and. prefere to lend his money on "jerry" 'built -houses, lines of empty shops, etc. We all realise that the farming industry needs assistance, and one of the moet vital needs of to-day is sufficient finance for longer terms and at a cheaper rate than is now ruling. A iarge per eentage of the farm bankruptcies aro directly attributable to inability to meet mortgages falling due, lack of capital, and lack of sympathy on the part of our business and financial institutions. Fellow-conutrymen, let us back up our farmere, showing our faith in them and help to pull the industry back to a paying basis. You investors, don't look nskance at the proffered farm security. It is in many cases far sounder than a large percentage of city securities.—l am.etc, LOGOS. (To the Editor.) Sir, —That the lengths to which •hanking propagandists will go are not ■bounded by any patriotic considerations! may be shown by Sir Harold Beauchamp'e speeches in Vancouver and Montreal. In the course of hie remarks flic is reported to have given vent to 'the following:—"Owing to inflated values or land based on the peak prices ruling for our produce, a large number of farmers in New Zealand are in difficulties, and are clamouring for more assistance •from the Government. That has been to a large extent averted through the (government Advances to Settlers Department, which, during the year ended March 31. 1926, lent to the farmers 3io less than £6,000,000. At their instigation, the Government, a few months ago, sent abroad a commission consisting of a. leading banker and farmere , president, to inquire into the various systems of rural credit and land hanks, with a view to ascertaining which would be suitable 'to afford the necessary assistance to needy farmers whose position does not warrant them obtaining assistance .through the ordinary channels—the 'Advances to Settlers Department, the banks and financial houses." May I, through your columns, protest against this bundle of inaccuracies? Sir Harold Beauchamp must know that hie statements are misleading, and unworthy of any publicist. He knows that other reasons than the high price of land are handicapping farmers; that the commission was not sent at the instigation of farmers, who considered a century and a-half of agricultural banking throughout tfie world, with consequent data, sufficient; he knows that there was no thought whatever of financing the "hopeless," but that a greater volume of finance was desired; and he knows •also, none better, that the State Advances did not "advance no less than £6,000,000 an the year ending March 31, 1926," on rural eecurities. The actual amount advanced was less than £2,000,000 :<£1,917,484), a very creditable performance in itself, but a mere trifle to the Jieed.—l am, etc., A. E. ROBIXSOX, lii». . 9r«aniei.Dg Secretary, F.U,