CRIPPLING FARMERS

Grey River Argus, 19 August 1931, Page 2

CRIPPLING FARMERS

SOLUTION—INTEREST REDUCTION FINANCIERS BIG MONEY MARKET. Continuing his speech on the Finan, cial Debate, Mr J. O’Brien, M. P, clearly showed the legislation access- • ary to help the farmers out of the present slumped prices. He showed in detail how the price of money was raised in a few years from 24 per cent to 6 and even 7 per cent. He also showed the interest paid on money borrowing during the war and later was two-and-a-half to five times as ■much in goods as was paid in 19201921. The only interjection made while Mr O’Brien was dealing with the matter came from Mr Downie Stewart, and the ready reply of Westland’s member silenced the Minister of Finance of the Reform Government Mr O’Brien’s speech is here continu cd:—

Now we have had legislation of all descriptions 'promised, and I would ask the members on the Government benches what they have promised our wealth producers—our primary producers—in the Budget, which is of such historical interest, so we are told. On page 15 of the Budget, this is what the Prime Minister promises, for I cannot find that he is going to give them anything more.— ‘‘ I repeat earnest appeal to mortgagees to review all the circumstances in an equitable spirit &uci recognise their losses by easing the mortgage charges or otherwise granting every relief possible. This appeal extends also to the stock and station agents, and the banks and others who have lent money on the security of the farmers’ stock and chattels...’’ Certainly the right honourable gentleman did give—perhaps I might use the word “give”—to the Rural InI termediate Credit Board £lOO,OOO to i lend to farmers —not to give to them,

! but to lend to them—in order to help them out of their difficulties. However, the main thing seems to be that the right honourable gentleman has appealed to mortgagees. My experience of mortgagees is that it takes a fearful lot of appealing to them to make them let up once they have you down, and.l am sure the appeal of the Prime Minister will not be taken much notice of if the mortgagee’s equity is i n the land. The mortgagee is going ’to sell it as soon as he has a buyer

for it, and, while the Mortgagors Re-i lief Act might help for a little, it can only help so long as the farmer pays ’tiis interest, and that is what I am • coming to. If the honourable gentlemen on the Treasury benches wish to

do the primary producers a good turn they will not listen to some of the suggestions made. I have heard two very timid suggestions made ‘here, one from the Opposition benches and one from the Independents. The President of j the Farmers’ Union pleaded with the. Government to reduce the rate of interest by at least one-half per cent. The hon. member for Wallace made the suggestion in the first place, and that plea was repeated by the President of the Farmers’ Union, the hon. member for Stratford. Those hon. gentlemen are both farmers, and they should know that a reduction in interest of one-half p«r cent would not

help the farmers very much, unless ■ they happened to be farmers in a very large way. I work it out that the. mortgage on an average farm in New i Zealand is in the vicinity of £2,000, j l and a reduction of one-half per cent j • in interest would mean that the farm- ! er with the £2,000 mortgage would get ■ relief to the extent of £lO a year. That would not help him very much. The hon. gentleman knows that just as well as I do. It would be a sensible suggestion that the farmer’s interest should be reduced by about 3 per cent. I i I should say, bring it down to about 14 per cent. The Government is quite silent about that. Why not bring the rate down, anyhow? One-half per cent was suggested by the two hon. gentlemen I have mentioned at a time ( when the banks were ready to put a ; reduction of one-half per cent into operation. I am suggesting a much greater reduction, and I do not care twopence what the bankers or the financiers .think about it. It is time that the rate of interest was brought down to 4 per cent, and hat legisla-

tion was placed on the statute-book to I make it illegal for anyone to charge. more than 4 per cent for money lent * out. If the interest on the average farmer’s loan was reduced by 3 per } cent, it would save him £6O a year in j in crept charge. I wish for a moment [ to go into our national interest bill | and show how it has grown in the last few years. There was a time—and itis not very ancient history—whe n we were able to borrow money at 2j per cent. I mqde that remark in a pre- ■ vious debate, and an hon. member —I think P was the hon. member for Dun- i c-din—said we had only borrowed at 1 a certain figure. Since then I have gone to the trouble of taking from the Year Books some figures which bear | our my statement. The year Book for. 1901 shows us that at that time we i had borrowed £10,689,203 at 3| per ; cent, £6,148.810 at 3 per cent, and £l9,- | 000 at per cent. i The Hon. Mr Downie Stelwar.t; What | was the discount? Mr O’Brien: I have not got the dis-! count, but I have got this fact; in 1896 ' our three per cents were quoted on the London market at £lO3 10s. Tn 1897 they were quoted at £lO2. In | 1898 .the quotation was £lOl 10s. I 1 take it, therefore, that our three-per- ! cent loans were pretty good loans to ■ | put on the London market at that time , ■ —when they were at from £1 10s to £3 10s above par. Since .those days the [ financiers have taken advantage of I the money market and of the war to i bump their three and a-half per cent i rates up to 5| per cent, 54 per cen‘, and as high as 6 per cent, and they are getting away with it. Further, we have got to pay that interest in goods. I think it was the Minister of Education who said to-night that we have to pay our interest to Great Britain in goods. We cannot pay for it in any other way. Everyone understands that we have got to pay in that way.

What his happened? With the inflation of 1921, whe n we borrowed money we were able to pay it back at inflated prices. But since that day prices have gone down more than half. Yet we have to pay the very same amount . of interest we contracted to pay in' 1920 or in 1921. In other words we 1 are sending from New Zealand about; two-and-one-half to five times the 1 amoun : of goods today to Great Bri-! tain to pay the interest Bill as we sent in 1920-1921, and the men who lent I .the money are getting from two and • a-half to five times the amount of goods for their interest than they re-1 eeived in 1920-1921. Is it not time that had a reckoning? Is it not 1 time that we saw to it that these > money-lenders got the same amount of goods they contracted for. Would that not bo fair, equitable, and just? If they want any more they should not be allowed to get it. Is there no one game enough to bell the eat? Hon. members know what the position is in connection vith our mutton, lamb, cheese, buttel and wool. Why it takes 5 lbs of wool today to pay interest’ for .the same amount of money borrowed that eoul be paid for by 11b of wool in 1921. .It i a time that we took this matter into serious consideration. If wo suggest a reduction in interest by half it is said that that would be extremely dangerous for the country. The money-mon-gers and the financial manipulators have got this country, —and indeed the whole World, by the throttle, and they are squeezing every nation in such a manner that unemployment is rife in almost, every country on the face of the earth. If wo look up the New Zealand Year Book, we will find that for New Zealand alone the annual interest. on the public and private debts amounts to £35,000,000. As near as I can work out .the figures, £35,000.000 is paid in New Zealand annually in interest charges on this account, and yet when anyone suggests that the interest bill should be cut in half in order to assist the Dominion out of its difficulties there is an immediate outcry. Why not go a little bit further and do what President Hoover has done with the people of the United States? He said to them, “We do not want any interest for the next 12 months.’’ Could not that be done in our case? Would i t not be better to do that instead of trying to pull the country out of the slump by a painful process of readjustment lasting from 8 .to 10 years? We eould do all this in one year if we went the right way about it. It is all very fine for another nation to give i us advantages of that kind, but when I we suggest a similar procedure in the | case of our own people it is not agreed 1 to. (To be continued.)