FARMERS’ MONEY.

Hawera Star, Volume XLVIII, 23 August 1924, Page 4

FARMERS’ MONEY.

(From the Mercantile Gazette). Spring i s rapidly developing, and it rs opening auspiciously lor tlie Dominion, as there is no reason to suppose that our primary products will fail to meet good markets across tiie seas. Our producers have to carry the whole burden of the public and private indebtedness, which has enormously increased during the last ten years. Population is flowing in, and if the new arrivals can assist in extending production, the wider is the arch which has to carry the weight. The tear that the termination of the moratorium will bring about hardship is groundIgss. Alhat we want more than anything is the stabilisation of land values upon a sound basis, that is calculated upon what a farmer who knows his business, and who lias adequate capital, can get from his land after payment of expenses and setting aside a reserve to meet the fall of prices for Ins products, which must follow within the next few years. If our land values can be fixed upon this base, then cheap money is wanted. There is capital in the Dominion, available to assist farniing enterprise if the Government could be persuaded to move out of the lines it now follows. Any glance at the Stock Exchange lists will show' that all good investments are in demand. Bank shares have been forced up to i ates which produce to the investor little more than five pe r cent. Up to the present time purchasers have received their dividends, income tax paid but it is expected that a change in the incidence of taxation during the session will alter the market value of such shares. We see no if good mortgages can be obtained, why share investments although they possess the attribute of being realizable at any moment should be considered superior v thing else, if the Government should encourage those who are prepaied to assist the farming industry " ith capital. At present the income tax works exactly the other way and tor so long as it remains, the country will be unable to obtain that supply of money which' is absolutely necessary to its well being, and it would be a good sacrifice to bring about greater elasticity in farmers’ finance. Those who are called upon to pay the maximum income ta.x, are in a better position to assist than are those who claim total exemption. The wealthy man has money to lend, but he cannot economically invest in a six per cent, mortgage under present conditions, as if the Government takes twenty-five per. cent.; he would have a ‘return of four and a half only and he can do better. We put forward a suggestion that persons lending on agricultural mortgages at five per cent, or less, should not be called upon to pay income tax. If the Government were to exempt such mortgages, we are quite certain that money would flow into the Dominion from outside quarters and there would be aige sums offering from local sources. We think that the farming section of the community would benefit immediately, as money would be in full supply for mortgages and at a cheap rate. We are also sure that the Treasury would not be much affected, as the loss would soon be made up by the increased prosperity which would follow it our farmers could obtain the money they require at a low rate, and such piosperity would be reflected bv the increased assessments issued from the lax Commissioner’s Office and bv the greater volume of goods which the country would require from overseas.