PROPOSAL OPPOSED.

Auckland Star, Volume LXI, Issue 287, 4 December 1930, Page 22

PROPOSAL OPPOSED.

BANKERS EXPRESS SURPRISE. "CANNOT DO ANY REAL GOOD" '•A .VERY DESPERATE REMEDY." (By Telegraph.—Own Correspondent.) - WELLINGTON, Wednesday.

Vigorous criticism of the moratorium proposal was voiced this evening by the head of one of the largest banks. "I am astonished at such a proposal being made," he eaid. "It is quite'unnecessary.- Not the least objectionable side of it is the certainty that the news that such a proposal has been made to the' Government will be spread abroad. It will create a very nasty taste on the other side of the world and give the impression that New Zealand is in terrible difficulties. A moratorium >is not wanted and cannot possibly do any real good. "This country has not recovered from the bad effects of the war-time moratorium, which was continued far too lopg. That moratorium led to inflation right through the Dominion. Many farmers who, when they were receiving war-time, high prices for their, produce should have paid off their mortgages and their commitments,, and many others besides the farmers, lashed out in speculation Many of them reinvested thenmoney on other farming properties and were caught in the first inevitable slump. It served them right. ...... - "The law of supply and demand.must be. allowed to take its course before things can come sright again. Costs ot production and retail prices must come down. Wages, I . feel certain, must come down. • The cofintry as a whole has. been living beyond its means. We must get costs . down and. get back to a healthier financial and economic position." •. • - . Regarding the position of- farmers generally, the banker eaid they were meeting their interest payments very well. The position was undoubtedly a tight one. Prices for 1 all primary products were down to low levels, but in the case of dairy produce there had been a greatly increased production, which was continuing this season. That tended to ease the position. "It is a fact," lie said, "that the mortgagees are meeting and treating the mortgagors very fairly. There has been a /tremendous amount of extension of time and, in very mniiy cases, casing of interest payments. The last thing the mortgagees of farms want to do at present is to enter into possession." "Any talk of a moratorium at present is quite -premature," said, the manager of another, important bank. "A moratorium avoided. It never does any gpod in the long run and it is quite uncalled'for. It must never be lost sight oi that occasions arise when many businesses are compelled to work at a loss for a tiiiie. There have been occasions when banks have had to work at a loss. A moratorium .niust'be regarded as only a very desperate remedy. ~ "There is comparatively little real financial distress in the farming community a whole, and there are in my experience vewy few. cases ,in which in- ' tciest 'payment's are'not being met." "