COMPETITIONS IN MAY

Dominion, Volume 26, Issue 50, 22 November 1932, Page 10

COMPETITIONS IN MAY

Masterton Society Resuscitated Dominion Special Service. Masterton, Nov. 21. At an enthusiastic meeting held tonight it was decided to resuscitate the Masterton Competitions Society, which lias been in recess for two years. A festival will be held in May. The following officers were elected Patron, Mr. T. Jordan; president, Mr. O. 11. Beetham ; vice-presidents, Messrs. R. Krahagen, C. M. Bowden, and R. C. Drummond; executive committee, Messrs. F. 11. Taylor, T. Vaughan. M. G. Mackay. E. W. de Lisle. J. A. Kennedy, W. Iggulden, F. L. Turner, and G. Daubney; secretary, Mr. E. Bell; treasurer, Mr. A. O. Jones ; auditor, Mr. P. Gully.

NEED FOR ACTION Difficulties of Farmers SOURCES OF REVENUE Hon. A. D. McLeod’s Views Although admitting he was not enamoured of a high pegged exchange rate, the Hon. A. D. McLeod, M.P. for Wairarapa, stated in an interview last evening when replying to statements made at the meeting of importers in the morning, that disaster would face the country if some steps were not taken quickly to assist the pastoral industry. He asserted that it appeared as though farmers were being asked to carry not only their own over-mort-gaged properties but the consequences of over-mortgaging in the cities. “I have read the various speeches made at the Chamber of Commerce Hall to-day,” said Mr. McLeod, ‘‘and I am afraid that speakers displayed more ignorance than knowledge in pointing a way whereby the people of New. Zealand may be extricated from the extremely critical position in which they find themselves. On this occasion I am speaking on behalf of no one but myself, and I will say quite frankly that I am not enamoured of a high pegged exchange as a solution of the farmers’ problems if some lietter method can be formulated. Future Difficulties.

‘‘Of one thing I am certain, however, and it is that if some quick and substantial relief is not found for pastoral farmers a crash will shortly eventuate which will leave few solvent men in New Zealand —farmer or any other.' All sensible men know of the overmortgaged position of much of the farm lands as well as city lands; but I am afraid that an effort is being made to compel pastoral farmers to carry not only their own over-mortgag-ed position but also the over-mortgaged position of many of the city lands and. businesses. “According to Government valuation figures, the farm lands of New Zealand, with improvements, are set down as 1 being worth £345,000,000. If stock thereon be added the value should at least amount to £375,000,000. Mr. Salmond at the meeting said: The Government was getting its income taxation mainly from the trading and professional communities.’ Surely this discloses something radically wrong in regard to an industry represented as being worth £375,000,000, and of which certainly more than one-half is capital invested by the holders of farm lands and upon which no income tax can be paid. “The farm lands of New Zealand carry improvements valued by the Government at over £135.000,000, and those financing the pastoral industry -will say without hesitation that over the past two years the industry has not earned 6 per cent, even on the cost of improvements and stock. What then is the use of men who know nothing of the industry talking of excessive mortgages? Australia and England.

“Mr. Hislop showed that he had not kept himself familiar with Australian happenings when he said that the Commonwealth was lucky enough to have had a loan falling due when it reborrowed at such an advantageous interest rate. Had he any knowledge at all of. Australia he would have known that the banks there have just underwritten an £8,000,000 internal loan (half for public works) at 3} per cent., at par. H.ad he also known more about Britain’s doings he would have known that Labour in Britain brought about a crisis by borrowing up to £100,000,000 to pay a dole; yet he says it would not be very serious for New Zealand to borrow some millions to pay what amounts to a dole to pastoral farmers, leaving future generations to foot the bill. “The plain fact of the position is that if a national crash is to be avoided some method must be devised almost immediately to spread as equitably as possible over the whole community in New Zealand a greater share of a load which the pastoral farming industry cannot much longer continue to carry. The meeting certainly did not endeavour in any way to show the Government how this was to'be done. It was simply a scramble to save each other’s interests oblivious of the fact that it is only through the pastoral industry that all or any of them can be saved.” CENTRAL BANKING Bill Will Proceed MR. COATES EMPHATIC “We are going ahead with the Central Reserve Bank Bill, and there need be no doubt about that,” said ■ the Minister of Public Works, Rt. Hon. J. G. Coates, last evening, when the possibility was mentioned to him that the measure might be sacrificed if the banks were agreeable to raising the exchange rate. “There can be no bargain of that description,” said Mr. Coates. “The idea is to have a chain of central banks throughout the Empire, and New Zealand is going to supply its link.” ATTITUDE OF STATE Endorsed by Merchants OPINIONS AT AUCKLAND By Telegraph.—Press Association.. Auckland, Nov. 21. A meeting of Auckland importers and merchants to-day unanimously passed a resolution endorsing the Government’s policy of non-interference in exchange rates and asserting that a high rate without economic justification would be detrimental to the Dominion. Some discussion was heard on the question whether a high rate has benefited Australia. Mr. J. B. Donald said that Australia to-day was living on overdrafts and a day of reckoning was bound to come. There was too much paper money; The chairman, Mr. Gainor Jackson, said that Australia was reducing taxation in one way, but at the same time she was arranging for a £2,500.000 bonus to the wheatgrowers, and there was also a bounty for butter. He prophesied that if the exchange rate was forced up here a reaction would come within twelve months. The farmers, Mr. Jackson continued, would find that payment of advances on produce by the banks—would stop, and the money would not be available till the produce reached London. The exchange market would simply collapse. and an enormous accumulation of funds in London would mean a great loss. Quite conceivably it would be six, twelve, or eighteen months after the goods were shipped before the farmers received payment.

SUBSIDY PROPOSAL Finance Leader’s Views FOR AND AGAINST Responsibility of Banks In view of the weighty and reasoned opposition that has consistently been maintained against artificial exchange depreciation it is singular that more attention and effort has not been directed to the launching of a sound alternative, remarked a leading financial authority yesterday to a "Dominion” representative. Surely, he said, a strong case for the seeking of other and sounder modes of relieving the hardships of primary producers is established by the Prime Minister’s pronouncement of the Government’s policy of non-interference witli the banks in the control of the exchanges, coupled with the steadfast stand taken by. five of the six banks against using their guardianship over the exchange position for the political expedient of redistributing the national income for the advantage of sectional interests.

It cannot be too strongly emphasised that this country’s destiny would be a sorry one if oi]r credit and financial structure were in the hands of banks which.would give way under political pressure, and depart from what they have openly declared to be wise and sound banking practice; and a volte

Importers’ Views The report of proceedings at the meeting of City interests held yesterday tinder the auspices of the New Zealand Importers Federation, appears on Page 6 of this issue.

face in the direction of exchange inflation would amount to nothing less. Especially is this so when it is considered that the individual banks cannot be classed among the sections bf the community to whose detriment a high exchange would immediately operate. . , Banks’ Grave Responsibility. It is thus evident what a grave responsibility rests on the banks In a crisis, like the present, continued the authority. The banks of this country have always performed their national duties With unfailing integrity, aud it is not to be believed that they will be swayed from their oneness of purpose now.

, “It is almost a truism that relief to those in distress must cost the country as a whole at least as much as the value of the benefits conferred. But the advantage of a subsidy would be that suclr relief would cost no more than those benefits, plus interest and sinking fund ; the adoption of such a measure could not fail to earn the approval of the rest of the world ou whom we depend for our livelihood. How can it be otherwise? For, by choosing a subsidy as an alternative we would avoid the many harmful reactions of exchange inflation. ‘The Dominion’ has already explained the force and incidence of these reactions, but it may be pointed out that with the trading position as it is, if the country cannot afford to relieve primary producers by means of a subsidy, she most certainly cannot afford ah artificially high exchange rate.” Oue of the objections that has been made against a subsidy is that it would be equivalent to saddling the Government with the bad debts of the stock and station agents and others. To some extent this may be so, but no one can be ignorant of the fact that if farmers are made sufficiently solvent to pay these debts —whatever expedient is resorted to—the very fact that such debts are paid means that someone must be saddled with them: if it is not the Government by way of a subsidy, it must be Importing intex*ests and wage-earn-ers by way of exchange depreciation. Government’s Alternatives. Thus it is simply a case of the Government being faced with the alternative of courageously shouldering the responsibility of extricating the farmers from their plight, or of passively leaving it to the agitation of sectional interests to endeavour by cajolery or coercion to induce the banks to quote an unjustifiable exchange rate in the unwarrantable expectation that such an ill-advised measure would prove a panacea for our economic disabilities. Another major obstacle to a subsidy scheme seems to be,the political objection that the public would see what the assistance to primary producers is costing them, and might not like it. But surely the chaotic reactions of artificial exchange depreciation is a terrible price for the country to pay for the doubtful advantage of keeping its people in .ignorance, even if it were possible to do so. But in this comparatively enlightened age the people of this country are not to be gulled so easily, and the Government would soon be inundated with petitions to relieve in- many other quarters the distress engendered by the triumph of ir.’i'visi counsels.