MORE MONEY.

Press, Volume LXVIII, Issue 20499, 18 March 1932, Page 11

MORE MONEY.

PROBLEMS OF THE FARMER. CASE FOR INFLATION. MR L. R. C. MACFARLANE'S VIEWS.

"We must face facts to-day. Wc are in an appalling state, with 80,000 farmers faced with little short of ruin. They are growing increasingly despondent, and there is a slowly sinking standard of farm production," said Mr L. E. C. Macfarlane, in his retiring presidential address to the annual meeting of the Canterbury A. and P. Association last night, when advocating currency inflation. Mr Macfavlane referred to the great army of unemployed, who, he said, were eager for men's work, but instead of meat they were getting only bones, while the rest of the community were having their wages cut, and were being taxed and rationed. There was only one way to regard the cause of the depression, and that was for everyone to take his individual blame. Everyone had been a super egotist, placing his own particular wants paramount. Intolerance had beey the world's besetting sin, but if anything farmers from their isolation were just a little ahead of the rest of the community. The Future. "What of the future?" asked Mr Maefarlane. "Who knows? Many ask where are our leaders. We have none. By successive Acts of Parliament, you have given the power of leadership to yourselves. Under our highly-developed democracy there cannot be leaders. A leader must be a man who can think ahead and can think better than 99 per .cent, of his fellows. But the ballotbox deprives us of that man. The men you do elect are no doubt the country's best, but they must abide by your accumulated wisdom, not their own. "We have all the machinery for full and increasing production, together with the land, stock, factories, and men and the will. The world is eager to trade, but the trade lubricant—money—is in short supply, and has not kept pace with trade. The result is a world over-supply of everything—work, produce, and goods, with the single excep-tion-of money. There will be no real recovery until money is also in oversupply. "Credit Mad." "Our hope will not come through more and more laws, regulations, and restrictions but in more freedom. But we want real mbiiey, not credit; we have all been credit mad. "There appear to be three ways' to get more real money, or a combination of two or more:— ' "(1) A free bank rate of exchange with the outer world. -You all know too much already about this. ' "(2) Inflation. of our present, paper .currency by the issue; of Government paper money, this to be used as a direct bonus to . all exports, or used by the State in its usual functions. "(3) Or the slow financial starvation of the community. We will have to tighten belts, reduce all wages, reduce interest, reduce hope and "faith, and establish charity as a permanent institution. "Any one of these methods will have the effect of stacking up surplus money in the banks at first, but rather than let it be idle the "banks would very soon have to reduce tlieir rates of interest. The world is divided sharply into two classes—those that borrow and those that lend. The lender's business, to be a success, must be to induce as many people as possible to borrow, so keeping up the value of his commodity; the borrower's business is to resist borrowing, so as to keep down the cost of the article that he wants to use. "Unfortunately, we are apt. to take all our financial advice from tliose that are lenders. They tell us many interesting things, but they never mention that losses compound just as quickly as profits, ■ and that money can only 'be borrowed at 5 per cent., or -under, folr a term of over ten years, at fixed commodity prices; otherwise it rains the I borrower and the lender. If one cares to buy on terms, i.e., time payment, one generally pays about 40 per cent, for the use of the money.' Farm Finance.. "Farm finance in 'New Zealand is in the most shocking state of any country in ,the world, and yet the financial advisers, on whose words of wisdom so many of you hang, wOuld increase the farmers' facilities for borrowing. The country is doomed if money .is not available for land mortgages, so they will tell you. A farmer's job is farming, not borrowing money. "Farming mußt have extra but not borrowed money during the next twelve months. Farmers are .slowly seeing that the more and more production bogey so strongly advocated by many outside interests is only a business, proposition to the farmer, provided there is a proportionate increase in money available to finance his increased output. Otherwise increased output actually will mean reduced returns. This extra money will be circulated throughout the whole community, and all will directly benefit immediately. I am, no traitor—l am not singing my swan song—l am merely stating uncontradictable facts. "I am sorry that I bring in politics—not bet. use I do but because it is so necessary. There is ever a thin line between politics and patriotism. "To-day politics must give way to patriotism*. We cannot at tho present time find glory in our country. We must rather admit our shame but hold our heads high till we can see the remedy. Inflation Urged. "For years we have resisted and fought monopolies of any kind, and it is a sad thought to think that this country is at present being run financially from London. One hates to advocate inflation of our currency, but it is our one method ot defence and protection at the present. Seductions of costs, of course, are necessary in many directions, but the reduction of one man's income will not necessarily increase another's finances. "Wage cuts are no doubt long overdue in some directions to balance budgets. Interest not already down must also make some sacrifice, but I think it far more important that taxation also should fall. Less taxation will immediately stimulate every industry and solve the growing unemployment. The only method to bring this about is to increase, our internal currency."