MUST FALL!

Grey River Argus, 7 December 1932, Page 8

MUST FALL!

N.Z. Land Values VIEWS OF TRADERS. At a meeting held in Wellington on Wednesday last, .-it which Air Edwin Salmond. President of the New Zealand Importers’ Federation, presided, 1 and attended by representatives of tin* Associated Chambers of Commerce, N.Z. ’ Importers’ Federation. l'.l\. Manufac--1 tnrers* Association, N.Z. Manufacturers’ Federation, New Zealand Harbours Association, Canadian and British Tra'h ers’ Association of New Zealand, and ’ the Commercial Travellers’ and Ware- ' housemen's Association, the following statement was approved: — ’•After carefully considering the var- : ions proposals which have been ad V.'im-i d for relieving; the position ol 1 the primaiy producer, it ,-eeins Io us that the principal trouble lies in the high land values and over-capitalisa lion which is common throughout New Zealand. With little probability ol 1 substantial improvements in the prices for primary products, it seems that costs of production have to be still fur lher reduced. It is questionable, how ever, whether this is not being - retarded by the various restrictive Acts that have been passed, such as the various Mortgagor's ItolieC Acts. If th.- readjustment of values were left to the natural operation of economic law. unfettered and unrestricted, a quick and efficient re-adjustment of costs would eventuate, but it does not seem that ' this necessary readjust meat will be | brought about by postponing payments of both interest ami principal on mortgages. which merely postpones the day of reckoning and maintains the high values of the boom period. ‘‘Admittedly this process will involve heavy and substantial losses, since values will have to be written down very heavily. Such losses appear inevitable, however, and. although they will have far-reaching consequences for some investment and farm finance companies as well as for individualami the Government. it would have the effect of placing primary industries on a sound basis, with the dead weight of the boom years shorn a wav Many, we think, would be able to produce again at a small profit, ami certainlv tin farmer would be in a position to take advantage of anv price increases that | might result from the Ottawa agree-| meat. A groat deal of the overwapitalisa I tion of the farming industry has been i caused by the extravagance of local : bodies. which have provided far in excess of requirements. Ir i~ dilhcult to see how this matter can be efficiently tackled, but the Bank of New Zealand’s proposal shows how much it moans to and weighs down th'* farmer. Tin* same position is true, also, of course, of the cities, where the weight of rates is excessively heavy and crushing to trade and industry. e ( believe that this particular phase of th< problem should be dealt with by the Local Bodies Commission which the Government proposes appointing. f ‘Tho proposal of the Bank of Xew Zealand that the Government should pay farmers’ rates for one year doe- . not appear 1o us to offer any real relief, except to the local bodies Th° *

. Bank’s proposal in reality only relieves those who cannot pay. It seems to us inequitable ami unsatisfactory, while I the remission. of land tax will only benefit the farmer to the extent of £515.000, the amount which it i> estimated will be collected from this source during the current financial y ear. Although there are grave objections to a bounty, it is to be preferred to an increase in the exchange rate, and it a natural proc-ess. unlettered by restrictive legislation, of reducing all values could be put into operation, ir might be found necessary ami advisable for a bonus to be paid to hardship cases only. In that event, the bonus should Le for specified objects and for a limited period. On no account should it be indiscriminately administered and it should In* confined to those who really require it. Il should not be possible, moreover, -for the bonus to be taken by creditors in payment of some debt ; already existing: the bonus would have to be ID cd cXrlil-ivel V f<H f:i fHi ihl pirivement and the invieu-i)i:: ol ;>i<> duct ion ‘ • We rPftli.-c that a sDingeni pr.»<•«•- j of devaluation is certain to inflict a certtiin amount of hardship and to adversely affect the Government’- fin : ances, principally through its advances , t > settlers and other.-, but after tak -ing into account the heavy los.-es which ■ would result, we think that a natural, readjustment is preferable and in th-'i long inn will give the greatest bene- j fits to the Dominion. The primiphproiiouncod tire not without precedent i in fact.