HELP FOR THE FARMER.

Press, Volume LXVIII, Issue 20715, 28 November 1932, Page 8

HELP FOR THE FARMER.

GOVERNMENT'S PROBLEM.

important QUESTIONS BEFORE

CABINET. "Fitoji Our Paumamemaui: Repoiiter.'. WELLINGTON, November 27. Various schemes for relieving primary producers and assisting the national finances were considered by Cabinet yesterday at one of the most anxious and urgent meetings held since the formation of the Coalition. It is not known -whether any of the schemes under discussion involved tho raising of the exchange rate by Government action and in face of the banks' opposition, but at tho end of tho meeting, after saying that he had no announcement to make, the Prime Minister, tho Rt. Hon. G. W. Forbes, declared that tho Government was maintaining its attitude of non-interference with the banks. Cabinet is to meet more frequently 5n the coming week, but Mr Forbes inado clear that the Government's plans may not bo announced for some days. Although members of Cabinet are believed to be fairly sharply divided on somo of the issues, Mr Forbes said they wero still a happy family. In spito of the succession of problems which have faced the Government during tho past year, Cabinet Ministers are agreed that they havo had to meet no more delicate situation than that which has developed during the last fortnight. For the second time ■within months it is proving necessary to take steps to check the disconcerting drift in the State and national finances, and tho task beforo tho Government has not been made any easier by the expression of widely divergent opinions within its own ranks. One Phase Ended. With its decision against a higher exchange rate, the Bank of New Zealand seems to have brought one phase of the agitation to an end, and the Government has consequently turned its attention to other means of bringing relief to primary producers -without unduly burdening the State. There is reason to believe, however, that the alternative proposals of the bank directorate —that the Government should accept a loan of £2,000,000 to pay the local body rates of all farmers, and should itself waive the claim for land tax —are not generally approved by members of the Government. The payment of farmers' rates by loan is regarded merely as a bounty in another form, resulting in a further deadweight of debt, and the Prime Minister has already stated his opposition to relief of this kind.

In its message to the Government the I Board of Directors stated that tlio sum would be offered "on reasonable terms." This phrase has apparently not yet been made any more explicit, although it is understood that tho suggested rate is 5 per cent. The Government, if it did deeido to borrow for Such a purpose, would, it is believed, seek a much lower rate of interest. The Prinio Minister has already said that interest rates aro too high, and the suggestion made by him to a deputation of commercial men | last week that an internal loan at a low rate of interest might bo favourably considered may not bo without significance in the present critical position. Banks' Attitude Criticised. }lr Forbes said yesterday that ho had not received any other propositions from tho Associated Banks, nor any statement by them on the exchange issue. Members of Cabinet have been openly critical of the banks' attitude. "I have yet to hear that the banks nre prepared to make any sacrifice/' said one influential Minister yesterday, while another declarod that ho and his colleagues wero convinced that the banks wero not prepared to do anything unless it were directly in their own interests. The Prime Minister has indicated that Cabinet's deliberations are still in their very early stages, and it is therefore only conjecture to suggeßt what the ultimate plan may be. Mr Forbes said it was too early to indicate whether any interest reduction legislation would bo brought down during the present- session. Neither Was he ablo to say what results had been achieved from tho Hon. W. Downie Stewart's mission to London, nor whether these would affect the present issue. Discussing the decision by tho Bank of New Zealand on the exchange question, the Prime Minister Baid that this was the bank's answer to the representations by members which the Government had handed on to it, and fet that the matter rested. Important questions of policy were involved in any scheme for helping the primary producer and the whole thing was not to be decided in a few minutes.

Although on some points there is not complete unanimity in Cabinet, there is certainly no -justification at the moment for the belief that the life of the Government is in danger. Mr Forbes himself said Cabinet was working in harmony. Although, he added, "You do not expect us to sing the 'FrotlibloWers' Anthem' every time we meet." Portfolio of Finance. Saturday's meeting of Cabinet was the first which the Minister for Finance, Mr Downie Stewart, has attended since his return from London. Humours that he intended to resign his portfolio were finally disposed of when Mr Forbes announced at the conclusion of the meeting that Mr Downie Stewart was resuming all his portfolios as from Monday. The Prime Minister admitted, incidentally, that he was very glad to be relieved of them. The Secretary to the Treasury (Mr A. D. Park) and his assistant (Mr G. C< Rodda) were both present at the Cabinet meeting, and there was a full attendance of Ministers. The only rtlier subject discussed at the meeting was the Central Reserve Bank Bill, which has been held up pending Mr JDownie Stewart's return, and which the Government now expects to ( introduce on Thursday or Friday of this week. The Bill has'not been an easy one to frame, and the adjustments with the trading banks that it involves have not been easy to make. However, it is stated that all but one or two small difficulties hovo now been cjisposcd of, and although Cabinet did not finally approve the Bill on Saturday it is now practically complete. The serious political consequences that may follow any too hasty action by the Government have already been indicated. The departure for the Motueka electorate, at such a time, of the lit. Iton. J. G. Coates and the Hon. E. A. Ransom has caused some surprise, but it i* understood that they have

stated tlieir views clearly and that their absence will not prevent the Government from announcing any decisions it may mako in the meantime. Another Deputation to Cabinet. From now until the end of the seßsion Cabinet will meet more frequently. Probably on Tuesday it will rec.eivo a further deputation from tho6e members who presented the original memorial seeking a higher exchange. This group contains several members with strong views who have opetlly expressed annoyance with the Government's delay in coming to the support of primary producers at the opening of a critical export season. An indication as to how seriously Cabinet views the situation is given by the fact thttt a caucus of Government members has been called, probably for noxt Thursday. Although it is stated that the meeting has boon summoned to discuss the central bank the Prime Minister will no th* i « e °l , P ortur '% to deal with position t a i, n f n i ancial situati °» and the Partv «in* +1 S ansntl within the began. ° exchange agitation