SIR JOSEPH WARD AND FINANCE

Dominion, Volume 22, Issue 80, 28 December 1928, Page 10

SIR JOSEPH WARD AND FINANCE

To the Editor. Sir, —I read with interest "Cowboy’s” letter, and note his preference for "Economist’s” ideas. In considering the question of internal borrowing, the economic conditions at the time must be taken into account, for, as a corrective when there is a surplus of liquid capital in a country, it is invaluable, and the war bonds served this purpose of absorbing finance that otherwise would have been in the field of land speculation in competition with the Government, the returned soldiers, and legitimate farmers. This policy, in conjunction with the proposal to purchase land with bonds, instead of cash, rebounds to the credit of Sir Joseph Ward, and had his warning been heeded, it would have prevented a big percentage of the boom and bust experience in New Zealand. As to the matter of price, I should say (although I’m not an economist or financier, but just an ordinary cocky) tiiat the 4i per cent.’ bonds referred to are the equivalent of 5 per cent, taxable bonds but the latter would not have the attractiveness desirable to serve the purpose of the issue. We cannot have the halfpenny and the bun, too, and to complain of this apparent loss, and applaud the deliberate throwing away by Reform’s remission of the squatters’ income tax of three or four times that revenue, is inconsistent. Now, coming to your correspondents mortgage, and the wealthy landowner. This is just the type of problem, liberal policy, and particularly Sir Joseph Ward’s legislation and administration, has solved successfully, and “Cowboy” cannot blame (although lie tries) the present fortnight-old administration for his difficulty, but rather Reform's weak and wrong use of the State Advances Office during its regime—wrong in the preferential advance (a) of £5,000,000 per annum to local bodies, and (b) of big sums to solicitors, land agents, and big business men engaged in speculative farming, all to the exclusion of the small working farmer and his needs, and weak in that the office was eighteen months behind with applications, and is three million pounds short of the legitimate and urgent needs of the farmers. ' If "Cowboy” had borrowed originally from the State 'Advances he could have paid £6 9s. 4d. instead of £6. 10s. per cent, per annum, and would have had two-thirds of his mortgage wiped out today, or if he had paid 9s. 4d. per cent, per year more, he would have had no mortgage left at all at the present moment. "Cowboy’s” plight has been the position of thousands during the last six years, but by no stretch of imagination can this be said of the period of the National Cabinet, nor can the war bonds be blamed for it as “Cowboy’ tries to make out. I suspect this mortgagee has some profitable investment in view—perhaps some farm snip (for aggregation does not trouble these people) with big profits (tax’ free) or perhaps investments mentioned by Mr. Reeves, chairman of the Dunedin Stock Exchange, who said at least anything from two to three million pounds has been going annually from this Dominion for the purchase of shares in Australian Banks, also he regretted the necessity for this, but the great difficulty was to find sound New Zealand investments.” I leave this without comment for “Economist and “Cowboy,” and others to ponder over in conjunction with the fact that there are thousands like “Cowboy” with good security, interest at 61 per cent, which has never been a day overdue in twenty years, and yet they are in fear of losing all their life's work and savings for want of nigney to redeem a sound mortgage — and at the same time money to burn in the country and millions leaving it annually. This what Reform’s government lias led us to and tile very thing Liberal legislation wits designed to prevent, and the state of affairs that has not, will not. and could not exist under Sir Joseph Ward’s administration. —I etC ” A DIGGER.

Napier, December 22. [“A Digger” appears to have drawn on his imagination for his facts and figures concerning the State Advances Department. Instead of depleting its funds at the rate of £5,000.000 a year for advances to local bodies, it has only advanced a little over one million pounds in five years. During the same period it advanced over £16,000,000 to settlers, and over £9,000,000 to workers, or £25,000,000 in five years. During his five years of office Sir Joseph Ward’s Government did not advance anything like this amount to settlers and workers, the total being some £14,000,000 in all. The statement that big business men and speculators have been favoured to the exclusion of the small working farmer is simply rubbish. The records speak for themselvesj.