The Evening Star TUESDAY, DECEMBER 18, 1928. ECONOMICS AND POLITICS.

Evening Star, Issue 20052, 18 December 1928, Page 4

The Evening Star TUESDAY, DECEMBER 18, 1928. ECONOMICS AND POLITICS.

Tee political interest in both Australia and New Zealand to-day is centred mostly round economics. The brief session necessary in Wellington for the installation of the new Government was remarkable for the relegation of the personal aspect to second place by the paramount consideration of finance. Money may bo borrowed by Governments for a variety ,of purposes—for armaments, for great engineering schemes, even in extreme cases for the payment of interest on earlier loans. But in this case tho bulk of the money proposed to bo borrowed is for the development of farming, possibly on the somewhat new lines of intensive culture of relatively small holdings, and for a transference of the financial burden borne by many established farmers who would prefer hifving the State as their mortgagee rather than continue to obtain their credit from private sources. It was this fact which caused general attention to be riveted on Sir Joseph Ward, for directly or indirectly nearly everyone is interested in such matters in a country so devoted to primary production as New' Zealand.

One of the most helpful periodicals to those who are interested in politics and wish to get at the economic kernel within the political husk is ‘The Economic Record/ published half-yearly in Melbourne by the Economic Society of Australia and New Zealand. The change from quarterly to half-yearly issues has resulted in the presentation within relatively small compass of a collection of articles of exceptional interest and value, for the array of talent at the editor’s command must be almost embarrassing at times. The current number, now available, is of especial interest to New Zealand, containing as it does such articles as a ‘ Review of Rural Credit Facilities in New Zealand,’ a ‘ Survey of Industrial Arbitration in New Zealand,’ and a concise history of the attempt to make New Zealand self-supporting in the matter of wheat,' this last named being from the pen of Professor Fisher, of the chair of economics at Otago University. Mr T, D. Hall, who contributes the review on rural credit facilities, restates in a, few words the conditions which necessitate, or at least make desirable, some such scheme as Sir Joseph Ward has brought forward. The question of rural credit has been acute in New Zealand practically since the depression subsequent to 19201 Long-term credit is the most important need of the average farmer. From private sources such credit has usually been obtained by way of a flat mortgage for a given term. This is convenient to most lenders, and perhaps essential to some. It is not, however, as a rule acceptable to the borrower, who has the anxiety and expense associated with renewal. The amortisation principle in connection with advances (table mortgages) is regarded with much more favour. All loans by •the State Advances Office are made by way of table mortgages, and the adoption of this principle for the repayment of loans is extended.

It is interesting to turn back to the preamble of the Government Advances to Settlers Act, 1894. which Sir Joseph Ward himself introduced, and the successful operation of which ever since has been 1 a great factor in New Zealand’s development. It runs: “ Whereas, by reason of the high rates of interest charged on mortgage of land and the heavy incidental expenses connected therewith, settlers are heavily burdened and the progress of the colony is much retarded: And whereas it is expedient that the Government should afford such relief in the premises as is consistent with public safety.’l. Precisely the same pre-

amblo might hold in respect of the now' forward movement in this same sphere to which Bir Joseph Ward has committed himself with the constituencies, and the further prosecution of which , may just possibly involve his visiting London in person. For the farmer still complains that he is unable to obtain adequate finance at reasonable interest. It has to be remembered that between rates of interest current in th» ’nineties and those ruling to-day there a considerable gap, and not even a wizard of finance—as his small-minded opponents once more refer to Sir Joseph to their evident self-gratulation—can narrow that gap to nothing. It is possible also, as Mr Hall points out iif hiS article, that today the fanner has an exaggerated notion of the security ho has to offer. Meantime investors have shown themselves less keen to advance money by way of mortgage over rural laud. The inflation of land values, the abandonment oi properties by mortgagors, and the frequent requests of farmers for the writing-down of mortgages probably have something to do with this attitude. But the State, through Sir Joseph Ward as .its mouthpiece, has recently expressed far more confidence than this attitude of the private investor betrays in the soundness of New Zealand and its future in the matter of primary production. Should Sir Joseph Ward visit London be should have little difficulty in convincing those who act on behalf of investors in Now Zealand Government stocks that their alleged objection to loans to the Government for relending on rural security is a profound mistake.