NOT HELPFUL

Evening Post, Issue 50, 27 August 1935, Page 13

NOT HELPFUL

MORTGAGE LEGISLATION

ADDRESS BY MR. SEMPLE

GTJAEINTEED PRICES x

A criticism of the Government's; legislatidn: for the rehabiUtation of the farming industry,was made by Mr: R. Semple, ; Labour MJV for Wellington. East,'; in ■;Usl\. pre-sessibnal; addiess. at- . Lyall. ..Bay last evening. Mr. Semple attacked .both the Mortgage 'Corporation-, arid;. the Ruial Mortgagors' Tinal: Adjustment Act, and=; contended that as tlie .Corporation was maihiy concerned ;with. dividends, it would '■ not be helpful to the Earmerwho was in trouble. He defended the Labour .Party's policy : of guaranteed prices, and. showed' thEtt on Sir Alfred Ransom's own estimate of the cost of/guaranteed prices such ■~ a policy: would;be cheaper; than the Goyernmeht'spresent policy of assisting the farmhtg community.;: '~.■.:■■:: ': ;;!f,-:j/'.

The; first'question to; ; be asked no doubt would be, "Where is the money coming from?"-said Mr. Semple in dis-; cussing: guaranteed prices. : ,The answer to that was quite simple. 'Money, contained vnb value ..in itself ;• it merely registered or^measured: value.,, In other words,) money;' drew; its 'value from goods or services.; That being so, the currency! arid credit of the natipa leflected the. value, of,,goods and' .services.. If/that .credit-and .currency were controlled by the nation, .through-the nation; for the nation, insteadiof being controlled as it was at, present' by a private,- faulty .banking, system, "; it would be. possible and-practicable;-. to [create money in proportiori to.the, value *of the products created;by^the larmers, and others.;; f.; Those".products were real wealth that gave money "its; value. '*&/.

"We could, therefore, '■[: create,'money corresponding. with?the;value <o£iy< the; products "created; aiid"payi;with >; that money; for the service that is.rendered to the,nation," he saiid.vl ?JThe farmers' standard of living is^.VtpSay^teed" on" a dim inishihg' and fliictuatmg - world's market. ■'■ We'submit"4hatVtWs:is:,altp-' gether\wrong.'?.'.''-He;'*bidd'be''giyen'':ai guaranteed .income/ ; based v.upon ■■'. ithe value ofythe. goods andVseryices he 'prd-ducedv-fbr■ the-,riatioicys'r^ :J;'4'-.i' :Y-?y .••;:i

/)| '/f ;■ 6the]r :.guAr^tee;s^[:: !■?' *? ■■'. The' /Government jii'was^opposed Oto' giving the 'farmers a'guaranteed 'Pfice,r but they were /not/opposed-'.to -giving! the private shareholders on'the Reserve Bank'a guaranteed dividend of "£25,000 per. year,; for ; £500,0001 §b.are/; capital that was'unnecessary. ■ jThe sam^ G6yermneht.Kad guaranteed a dividend bf £22,500; lo .i;thM' shareholders ■• of ■••■^•the Mortgage: Corporation,-:with■'. ah; *■"£&&-. tionairguarantee ffiat?if-there;be-any, losses .sustained 'during/the/;operation, of, the Mortgage' Corppratidh t'itliose Josses would: notVbe^carried;byl^tne bondholder tor sharehbider;i;biit ;by'%ie: nation"./ The officials/who /were'to-icpri-trol'the Mortgage.I.:."'Corporation"and. Rural Mortgagors? / tfirial /Adjustment Act, 'supposedly ■ in;, the interests of the farmers,.were^guaranteed[ah income' between them of .over/ £14;000 per year. TheVliabour iParty said that' if it: wer£ fair, to give ■ those guaranteesftp > nonwealth producers, It.wasia-Just, and rea-: sbn^ble; thing to give: a; guarantee "to the .farmer; whoproduced; the' major portion of the nation's^oodsttiffsr:"The farmer is, the onlyi;vwßaitH^producer that.4s not ;guarMteedVan;;cinc6nfe,'*{b.e said,' : "and we submit - that■ if>vthe;irivestors.of ■capital-.are:.entitled.'to''-ia guaranteed income, i'sb'r'.is-the^farnier."----:In -hisDannevirke-speech, Sir Alfred Ransom had stated that' the-tbtal' coni; cessions) given to i armersjby t th^'Gpv-' ernment,:?.--.through' '<" taxationi^Avas. £ 14,pOO,000, : :.-ai;d.; that v-f this Ssumiiiay: omits.many itenisVand is- uHd^rathe^ than >-; over-estimated.?:w --^le^Minister of ; Finance,; in'r -ihtfdducmg-ifie'^Mibrt-gage CbrEoraUbnßm-lastvsessioriifesaid that.5,0,000/farmers -put-of;.a; total' X -"of '84,000 were ;in!.. a -state',pf > bankruptcy^ which .statement;, proved^ that -the £ 14,000,000 .that;had^i;beeh::extracted from.thepockets. of v the'people, 'supposedly to save: the:farmers;:had not reached :the pocketsi; ot ihe'vfarming community. ;: :;.;-: ;/.' ■'j^'^'A'i'^u^i-'^r.: ;■;/(' i:v:;.i;>\' PRICE;- CTCLESit'^AK^fe;/': By. the; aid ;'pf a^ graph Showing ? 'iiie nse- and/fall in the.prices Vof ipriinary products, and the; price": cycles :in the world's markets, Mr. Semple^contended that "the good years cancelled but-ithe bad:years. .The mdicatibris wereithat1 the pricetgiyeriVitbfA- the farmers was nothing mpre'or less th'aii arepayable advance^and-m the^long ruii the nation might1 lose -nothing; "v" The Governmeriji's responsible for taking out of. circulation' £110,000,000 within, the- last -five years. It had reduced- the people's/income 1 to a; minimum and: at thesame .timeihad raised^ the burden of taxation to ;■■ a maximum: Thei-.Labour'Parly; would restore;that income to, theipepple;' and by so doing make it quite easy for. the people to meet. any Ibsslthat "might accrue; as ■ a:/result ot /overseas -sales. All the farmer \ras short'of'was :'an' income j /the Labour party's guaranteed price would give him/that income^ and the £14,000,000 tax per;year.'that''the Government had levied on- the 'people would automatically be cancelled but. If Sir Alfred Ransom's £13,000,000 per year estimate : for guaranteed 'prices: were correct (which'was disputed), the community would have £1,000,000 less per year of a tax tb'c'arry,' and the farmer would have an;assured income, instead of.; being "in / a state of bankruptcy; ■■,->; - ;,...%:';'•■■•.;.v[v:;:;•.'■■":.■;;-;•■ ;*:'-;,:; w; '"'' -INDUSTRIAL ■■DE^LO^MENT; : -^ The; Labour Party"would remove the sales tax, "and would develop the primary and. secondary/industries with the object of making the country more self-contained. ■ Air physically fit inch would be absorbed' in usefup employment, and the £4,500,000 annual" unemployment tax' would be disposed of. The, farmers would' be disappointed if they expected relief from the Mortgage Corporation, and/the Rural Mortgagors' I'ihal Adjustment Act. :'The Corporation was only a dividend-mak-ing concern. There 'was £500,000 share capital, and the interest rate was 4 \ per cent, with, a;guaranteed dividend of £22,500 a year. ' There was a second guarantee'that any losses would be carried by,the nation, riot by the"bondholders. The two managing directors each received asa'lary of £2000 a year, and the three shareholder directors each received £500 a year each. The chairman-of directorsrreceived between £1000.and £2000 a.year. There wasnot one farmers' representative'on the organisation, which was purely an institution designed to protect, the interests of the mortgagee against the interests of the mortgagor. AH they had to offerthe,farmer was a stay order. When this Bill' was introduced into Parliament, -the Minister of Finance, said, that it was:/designed to: save the farmer who'was" in difficulties It had Eince. been decided by Cabinet that the Corporation would take over only sound mortgages, which meant that the man who really heeded assistance would receive notice to quit "This not only applies to. the farmer in difficulties, :but also to the-'worker who has a home under the advances to workers legislation,and who is back in his payments, through no fault of his own," he said./. It was obvious that the Corporatipn^being a dividend-hunt-ing concern, would not consider any case that was not jan'aspet, . ' ■