Demand of Capital

Dominion, Volume 24, Issue 63, 8 December 1930, Page 13

Demand of Capital

Sir, —At the present time • capita] emSloyed in primary production is claimig 7, 7-J and 8 per cent, per annum, while at the same time it is not producing more than 2 per cent, clear at the most, after the necessary expenses, such as local rates, labour, stores, etc., have been met. The question is: How long can this continue without a general breakdown? To pay 7} to 8 per cent, on capital means paying the whole capital back every thirteen years, which is proving’an impossible task, unless every year is a good one. One “slump” year throws the producer back too much for him to recover under this burden. If capital could be induced to “balance its budget,” that is to say, not demand more than it is producing, a crisis would be avoided, but uhfortunately, capital will not, until it is too late to save the situation, when, owing to lack of means to carry pn, much land will have gone back, much more will be lying idle, and most of the steep country will have reversed to its original state. How much better it would be for capital itself, producers, and labour, if capital, acting with the Government,' reduced its demands to something like what it is producing off the land before it is forced to do so by economic pressure. Before another year has passed, professional men —doctors, lawyers, professors and all others who charge large fixed fees for their services—besides shopkeepers, will realise that all their incomes really come from the laud, when traced to their sources, and when that flow is cut oil, the city incomes will also disappear—unless capital will reduce its demands before this awful state of affairs becomes not only an ugly nightmare, as it is at present, but an absolute fact. The man in the best position to-day is he who gets 14/- per day “from the Government.” Many of us would like to be in that position, free of all overdrafts, mortgage interest, and other liabilities. Just getting a solid 14/- per day—forgetting in the meantime that the Government has to get it from from the land in order to pay. it over to the fortunate ones.—l am. etc., . RANGITIKEI. November 27/