CHEAP MONEY FOR FARMERS.

Clutha Leader, Volume XX, Issue 1036, 8 June 1894, Page 6

CHEAP MONEY FOR FARMERS.

TO THE EDITOR. Sib, — In your issue of the 27th April, " Farmer " makes some able remarks on my letter to the Hon. Mr Ward, and I wish to thank him for the compliments paid me. I think I have seen his writings in the Leader before now and I respect his opinion, but I think he is inclined to too narrow a view of this important measure. He says, "Mr Murray speaks as if he thought all the farmers would be able to take advantage of it." I certainly wish all who required it, and could give the necessary security, to take advantage of it, but if even half could borrow to the extent of half the value of their land a great deal would be gained. It would free a large sum of money which could not be kept idle in the banks, but would be lent out at a lower rate of interest in conformity to what others needed to pay and in accord with the increased supply. This would cause more labour to be required, which would induce greater production and a greater local demand for commodities, and would be the means of compelling agents to work for less as the farmers would be more independent and the country would be benefitted all round. " Farmer," I think, forms too low an estimate of the benefit it would be to farmers by one half, but until we know what they are paying for interest and what nfbney can be borrowed for, it must remain an unknown quantity. The more the security, the less will require to be sent out of the country to pay interest. For this reason I would suggest that a million in bonds should be lodged in the Bank of England bearing interest at 3 per cent as an insurance against loss to lenders and as a fund to pay off the national debt, half the interest to be paid by a percentage on the money advanced to farmers, the remainder from the revenue in consideration of the benefit all classes would derive from cheap money. This, along with double the value in hind, would give absolute security to lenders — : far superior to money invested in the funds, where the only security is 2| or 3 per cent extracted from the overburdened people. The money paid being subject to every change in the political barometer and not being payable at par the whole received in interest is liable to be lost at any moment, and parties sinking money in the funds may be without income and living on the capital. This investors would find out and if wise would sell out and invest to greater advantage, as Mr Ward's scheme should bring securities face to face with investors in London. This can be done by intending borrowers forwarding an application and certified copy of Crown grant, extent and particulars of land and the Government valuation. A photo might also be sent which would be a good advertisement for the colony. Those looking for an investment would select one or more properties to suit the sum desired to be invested, when the money would be handed over to the. Agent General and the interest would begin, the money being put. to the Government account and advice sent to New Zealand when the advance could bo marked upon the Crown grant, the money paid over, and the grant held by the Government as attorney for the lenders. This would do away with middlemen and monopoly, expensive valuations and more expensive legal transfers, and would cost very little as the present Government machinery could do all that was necessary with little change or expense. I did not go into the ramifications of the measure in Mr Ward's letter, believing that he was quite able to view it in all its aspects. Nor do I wish to do it now, but seeing the narrow views taken by " Farmer " it may be necessary to point to some It i 3 not right that a country should borrow a million of money and deposit it in a bank to keep its credit, good and to be dangled before the eyes of farmers, and when they have taken the bait and begun to improve their land the money is called in and they are puller) up with a wrench which has knocked many off their feet. Nor is it right for the directors of an institution to take its money and landshark to the tune of forty thousand pounds for one of them. Nor is it nice to see a director seeking whom ho may devour walking to and fro before the head office, with his hands under his coat tails chuckling over his good fortune and concocting a speech for the next meeting of directors, where the usual 17 per cent dividend is expected to be declared. Either the institution was paying depositors too little or charging borrowers too much. And what is the condition of a brother of one of our great agencies at the psesent time 1 I would ask " Farmer " if such doings are likely to inspire confidence in investors at a distance, where things are generally made worse than they are. Be it remembered, wherever English money is invested the produce accruing is sent into the British market and sold at what it will bring to pay the interest which (tho balance of trade being against the country) is paid in gold again to be invested. This is driving English productions out of her own market, as her heavily taxed commodities cannot compete against such odds (nor can the colonies), so the land is left out of cultivation and the rural population are hurdled into workhouses or driven into the towns, while England is paying the taxes of America in the shape of duty put on all she exports into that country. This is a one-sided game which cannot last. Bat I am digressing, and to return. The low prices here are a great difficulty which can only be met by reducing taxation and the cost of production, and lower priced money must greatly tend to do both, and also raise the value of the land. " Farmer " regrets I did not enter more fully into: the currency question. 1 would gladly have done so, but it is beyond the reach of colonial politics and may not be settled for years, and the time the grass grows the horse starves. I thought half a loaf better than no bread, and to have gone ito the question would not have forwarded what I had in view. At another time, however, should health permit, I shall be greatly pleased to give my thoughts on the snbject,which "Farmer " says rightly is one of great importance, hardly second to the drink question in my ' opinion. r-I am, etc., T.M. Glen Murray, 6th May, 1894.