A BANKER’S WARNING.

Hawera Star, Volume XLVIII, 8 August 1924, Page 7

A BANKER’S WARNING.

DOMINION LAND VALUES. “KEPT UP BY MORATORIUM.” Mr IV. Pember Reeves, chairman of directors of the- National Bank.of New Zealand, when addve-ssing shareholders at the annual meeting in London ro ierred to land values in the Dominion In an account of the proceedings, bv the Post s London correspondent. Mr Reeves said: “The introduction of electrical power into all dairy farm work, winch will be possible on completion of hydro-electric works now under way, should cheapen production as well, as ameliorate the working conditions undei which the industry is carried on. Much has been written and spoken of prices ruling in New Zealand ftp- dairy land. That a good deal of land is overvalued is certain, hut it is equally certain that profitable dairying— at any late at the prices of the last few years depends upon the fanner. May I quote an illustration? In the North Island a man five years agoi bought a small area of less than 40 acres at £5/ per acre. With his wife and family he ran a dairy herd, and in the winter months he took up road work for the county. l'n five yearns he paid off a mortgage of £BOO. installed and paid tor a nuiking plant costing £2OO, had a substantial cash balance at tbe bank, and was able to acquire a small adjoining area of some. 30 acres. This may be exceptional, but it does show what the right type of self-reliant worker lias been able to do—at any rate at present prices of produce—with dairymg land at nearly £6O per acre.” At the same time Mr Reeves remarked: “It- may be asked why one should utter words of- warning to the people of a country which is enjoyin" a flourishing trade with excellent and to a Government which can show a surplus and raise a loan on as good terms as any and at better terms than most. But though New Zealand’s prosperity must continue so long as prices remain at present levels, there are features of her finance which will certainly become uncomfortable if prices fall, as in a few years they are pretty certain to do. Land in' New Zealand is fertile and productive, but much of it has been bought at high prices. Ihe price is still high—and in not a few cases too high—and the amount of debt secured on land is extremely heavy. There has been too much buying with borrowed money. The moratorium which has protected mortgagors and helped to keep up the price of land cannot be indefinitely prolonged. “The Public Debt, moreover, is well over £200,000,000, and though the prices paid for cur loans since the armistice -are relatively low, they would have been, high before the war, and may be thought high ten years hence. Taxation in New Zealand is not quite so heavy as the English Chancellor of the Exchequer put it in a statement laid before, the House of Commons; still it is heavy, indeed too heavy, and the floating of large annual loans, though very pleasant at the moment, adds to the permanent appropriations and makes retrenchment difficult. Moreover. New Zealand cannot have a cheap Civil Service, and for various reasons, into which I have not time to go now, ought, not to try to do so. All this means not that the country is in any danger whatever, but that it ought to look ahead in a. good time like this, put its house in order, and endeavour as fair as possible to re-, duce liabilities.”