FARMERS HIT.

Auckland Star, Volume LXVI, Issue 268, 12 November 1935, Page 11

FARMERS HIT.

GOVERNMENT POLICY.

CANDIDATE'S ANALYSIS. ft MR. COATES' "BOOK-KEEPING" A most attentive hearing was given to Mr. J. Caughley, Democrat candidate for Kaipara, at Helensville last night, when he spoke to nearly 200 people in the Agricultural Hall. Mr. C. West, chairman of Helensville Town Board, presided. Throughout an address..lasting over two hours there was not a single interjection and the candidate was accorded a vote of thanks by acclamation. Mr. Caughley said that the Government claimed four great achievements during the last four years. They were the raising of the rate of exchange, mortgage legislation, the handling of the unemployment situation, and the control of the country's finances. He then criticised the Government's actions under all these heads and contrasted them with the Democrat party's policy. It was no use finding fault, he said, without producing something constructive to show how the affairs of the Dominion should be managed. In introducing legislation dealing with mortgages the Government had promised a plentiful supply of money for lending out to farmers and others and the reduction in the rate of interest. New Zealand had borrowed about £60,000,000 for lending on mortgage security over a long period of years. That money was still owed by the Government, although the interest was being paid. These mortgages had been handed over to a semi-private company—the Mortgage Corporation—which had picked the eyes out of them. It had taken all the good securities—those with good mar'gins—and they were now part of the corporation's investment fund.

The candidate admitted that the State would have lost on the bad mortgages in any case, but the fact remained that the corporation had taken over four-fifths of the mortgages, which represented about £48,000,000 of the safest and soundest of the securities and paid the Government 3| per cent interest. The Government should have retained its lending- department and reduced the rate of interest to the farmers from 4J to 3g per cent, plus I per cent for expenses, instead of allowing the Mortgage Corporation to take charge. What had taken place proved that the Government was not the farmers' friend. The new legislation allowed the corporation to charge four times as much for administration as the Government formerly charged, and the corporation was actually charging three times as much as the State had previously done. In the administration cost the farmer, in addition to his interest, had to pay 4A per cent dividend on £1,000,000 of shareholder money invested in the corporation. That "inflicted dividend" at 4J per cent was at the very rate which the Government itself repudiated about two years ago on-its own loans. In accepting only 3| per cent from the corporation on the best of the mortgages, while the State paid 4$ per cent on the whole of the mortgage money, the Government was losing approximately £1,000,000 in interest every year.

Mr. Coates' Responsibility. Mr. Caughley said that Mr. Coates was responsible for raising to farmers the interest rate charged by the Advances to Settlers Department from 4£ to 5} per cent as from 1926. That was another blow to the farmer. The candidate characterised as "effrontery" the statement in the joint manifesto issued by Mr. Forbes and Mr. Coates: "The Government's aim will be to promote continuance of the cheap credit policy." The farmer might well exclaim, said the candidate: "May the fates spare us from the continuance of such a series of blows as this Government has inflicted on us by its mortgage policy."

"The Democrat party would abolish the Mortgage Corporation," said Mr. Caughley. "It would get rid of the shareholder money and dividend, let the farmer have the double reduction in rate of interest and reduce administration costs by two-thirds. This policy would not cost the State one penny more than the present cost under the Act." Referring to the Mortgage Adjustment Act the candidate said it might be called "The Enslavement of Farmers Bill." An official pamphlet titled "What haa the Coalition Done?" con tained the statement that the moratorium on mortgages was essential to prevent wholesale bankruptcy and Mr. Coates had said that about 50,000 farmers were in danger of bankruptcy. The last Government measure had removed the protection of the moratorium unless under the new "stay order" the farmer, without a penny more of assistance, could bring his finances to a sound position. Thus the Government, on its own statement, had exposed to the peril of bankruptcy some 50,000 farmers. The "stay order" was the final iniquity of the legislation. The Democrats would repeal that iniquitous and tyrannical Act and with one combined lending department would clear up the mortgage trouble by facing the losses, while giving overy consideration to the farmer, particularly to the returned soldier settler who had been so shamefully treateri under the Reform Government with Mr. "oates in the Cabinet. Public Accounts. In dealing with the public accounts Mr. Caughley said the Minister of Finance, Mr. Coates, alleged that he had brought the Dominion to a state of stability and surpluses. After' quoting ;omments by the Auditor-General, lie laid that Mr. Coates had often counted :he same money twice over in two ieparate accounts, and had also put lown as revenue amounts of interest hie or payable but which had not been laid, and had put down as revenue well >ver £1,000,000 of loan money or debt. H Ruawai Mr. Coates had declared that he charges of manipulation of public accounts wa.s merely a matter of book;eeping. He also charged Mr. Coates vith "an unworthy suppression of part >f the Aiiditor-General's certificate." rhe Auditor-General had certified the iccoivnts as correct, but with specific xceptions, including the statement: 'The credit balances shown as 'cash' re over-stated by an aggregate amount if £484,000." Mr. Caughley also deatt with the raisng of the exchange rate, stating that he Democrats would remove the arti-1 ;cial exchange and would assist the | α-imary producer by a direct export! ■onus, which would be as simply and! conomically administered as the butter- | at bonus paid by a dairy factory. It /ould be graduated so as to give most elp when prices were lowest, and also 1 respect to the farmers' incomes. No ionus would be paid to those well nough off to need no assistance from 1