FARMERS' FINANCE

Evening Post, Volume CVI, Issue 16, 19 July 1923, Page 4

FARMERS' FINANCE

QUESTION OF MORTGAGES

CRITICISM OF BANK METHODS

Farmers' finance was the subject of a leading part of the address of the presi-' dent of the-Council of Agriculture, Mr. J. T>. Hall (Canterbury), at the annual meeting of the council yesterday.

"It is," said Mr.- Hall, "desirable to say a few words regarding farmers' finance generally, and in particular as to farmerl;' mortgages now current, many of which are subject to the protection of the moratorium. Of the £240,000,000 of mortgages registered in New Zealand, it is roughly estimated that about £50,----000,000 is the face value of the mortgages for which provision has to be made a.t the end of next year, and it, is believed that the greater. part of this amount •is lent by, New* Zealand investors^ and very little comes from abroad. The problem is: (1) To satisfy these investors that the security. upor> which their money lias been lent has not depreciated to such an extent as to make renewals of their, Joans matters of such risk as to justify the withdrawals of these loans'; and (2) to obtain the reinvestment ,of these moneys on reasonable terms •as to rates of interest. , "It seems as if the chairman and exehairman of directors of the Bank of New Zealand were doiug their, best to destroy the. confidence of these investors, by indulging in generalities as to New Zealand farm lands ■being overvalued; they are probably right as to some class of land., which has been the subject of over-,specttlation, but it is very unfair to the farming community generally and misleading to investors. If the bank was prepared to. forego some of the big dividends if luis paid during and after the war it might save farmers something in the rates of interest on their loans, and ."thus harden "land values. The close relationship and community of interest between agriculture and finance is a fact beyond dispute; agricultural interest is hot a sectional or class interest; it constitutes the economic foundation of the. country. . Directly or indirectly the interests of agriculture arc the interests of all.

"It. amounts to this : The basic business of. New Zealand, is • the production, -distribution, and marketing: of egrici.il' Uiral.uud pastoral commodities, and financial machinery has got to be designed and organised properly t 0 accommodate this fundamental enterprise, and its aim should be to harmonise the system with the present process. "farmers want the help and sympathy .of. the banks in the matter of arranging .their mortgages, and .it seems a time when bankers, merchants., and chambers ,of commerce should join hands with farmers in tne solution of their problems. j. .'{f aljin§ ally SBtisfactory arrangement [With the present investors "in farm mortgages, there appeal- to be three alternatives, which might be adopted to provide icr these mortgages; They are :— "(1) That th« Government should extend the .xcommodation provided through the Advances to Settlers Department, and further substantially increase the amounts of loans. "(2) The appointment of a board of valuers by the Government and the issue ol Government debentures up to 60 per cent, of the ascertained values of any Harms on the same terms as to interest and repayment as in loans by" the Ad"vaiices Department. '■(3) The formation of a farmers' land mortgage association,.; which should ar-lange-that its farmer members should assemble their securities arid jointly pledge, their credit t & a substantial extent lor the purpose of getting the investing public to buythf i3onds of the association, thereby provide funds o&trm:.^^" 1*6-^ 6ithL Wf 1k not *8 advantages of Either of these schemes, but I would like o impress upon.the council theTnYces o^ tWs m m aif g P r °™iOn of some «nd The matfß? • r farmers' mortgages. I Ititn h ?T Urgent > and the time SofoSal^td^l