TRACTS FOR THE TIMES.

Auckland Star, Volume LXV, Issue 45, 22 February 1934, Page 6

TRACTS FOR THE TIMES.

DEBTORS AND CREDITORS. (By PRO BONO PUBLICO.) Olio very interesting result of the crisis in America is that it turned the economists on to a Statistical investigation of the internal debts of the big Republic, and some of the information they gathered is very striking. The'devaluation of tho gold content of the dollar will lighten tho burden of debt considerably, and there, as here, sympathy seems to be reserved for the so-called unfortunate debtor. Tho economists sum up the position in this way: "If any generalisations about debtors and creditors*are possible, it is probably true that, in terms of dollars, the majority of the debtors are corporations and the majority of the creditors are individuals." The greater part of tho investments is made up of the savings of individual*, and the average holding is not largo. The newspapers print, a table showing the long-term debts in the United States, and it is surprising to find that farm mortgages account for only f1.7 of the total. Indeed, farm mortgages aro tho smallest item, and one would not have guessed that judging by the reports of tho desperate state of the fanners there. Government debts, both Federal and State, railways, public utilities and industrial debts are all larger than farm mortgages, and if they are going to discharge them in a depreciated dollar then they will secure tho greatest benefit from the ' Roosevelt policy. First, of course, get your dollar, but cheap money should raise prices and make that task easier. And who are these creditors, the people whose holdings are to be devalued so drastically? Well, prominent among them aro religious institutions that have invested trust and other funds almost solely in Government land local body securities. Other large holders are education institutions, hospitals, established foundations, and organised charities. Altogether the investments of these five groups aro said to total nearly 9,300,000,000 dollars, and 14.3 per cent of this amount is invested in mortgages and real estate bonds. Statements such as these make one wish that we had a body able and competent to make similar investigations in the Dominion. We have plunged ahead with readjustment legislation, and, I am afraid, have no detailed knowledge of tho position. One thing that probably would emerge is that the idea of creditors as a moneyed class would have to be jettisoned. We do not possess such a class ia New Zealand.