King Country Chronicle Thursday, December 20, 1928. RESTORING CONFIDENCE.

King Country Chronicle, Volume XXII, Issue 2669, 20 December 1928, Page 4

King Country Chronicle Thursday, December 20, 1928. RESTORING CONFIDENCE.

One of the greatest problems that this Dominion has had to contend with in recent years is the lack of confidence on the part of financial and commercial institutions in the general trade outlook, resulting in a disinclination to place further money in circulation except on giltedged securities. This applies more especially to lending money on rural securities.

The Minister of Public Works, Hon. E. A. Ransom, emphasised this fact when speaking at Dannevirke last Saturday, and the position in this connection is not at all satisfactory from the point of view of progress and general prosperity. It is well known that there are large sums awaiting investment in the Dominion, but of late the State Departments have been responsible for the bulk of the money loaned out on broad acres. The Rural Intermediate Credits Scheme has been the means of attracting a certain amount of private capital for the purpose of financing farmers, but the State is practically j responsible for loans under this plan.

Considering the large amount required for maintaining and advancing the farming industry of the Dominion—its very life-blood—more money is required for this purpose than the State can reasonably borrow, and'' it is for the outside financial institutions to provide assistance in this way. It is conceded that the State Departments will only lend on firstclass securities, and that the other institutions have had unhappy experiences in regard to lending on rural securities, but now that the farming industry is on a much better footing than for some years past, it is to be hoped that there will be a greater flow of capital in the direction of rural securities. The outlook for the man on the land is distinctly encouraging. The boom during and immediately after the war was the means of stifling confidence in financial circles so far as farming propositions were concerned. This boom was one of the most disastrous commercial happenings in the history of the Dominion. A lesson has been learned, however, which Is not likely to be forgotten for many years to come, and with an agriculture and pastoral country unequalled in any part of the world, added to which the quality ~x>? our exports of primary products is becoming more popular overseas every year, the future for farming gives j cause for sound optimism. There is still room for enormous expansion and progress in this Dominion, but it is the farming industry that must lead in this way—the development of the towns and secondary industries will automatically follow. For this reason it is essential for the future of the country that there should be a return of confidence in broad acres, as a sound investment for the financial institutions and private lenders. Judging by the present outlook, such a confidence is well warranted. The chairman of the Auckland Stock Exchange, in his annual address recently, stated that there is every reason for optimism for the future of this country, while the same opinion was voiced by the chairman of the Dunedin Stock exchange on Tuesday. These cheerful opinions are undoubtedly due to the improved outlook for farming generally. There is no limit to the markets for our primary products provided the same standard of quality is maintained and with the improved methods now being adopted by farmers —methods which are being improved every year—there should be no falling off in this direction. Even with conditions in Britain far from favourable, this country is receiving good prices for its exports. If this condition should improve in our main markets, they will be for our further benefit. In the. face of all this, it is far from satisfactory to note the remarks of the chairman of the Dunedin Stock Exchange that from £2,000,000 to £3,000,000 leaves this Dominion every year for the purchase of shares in Australian banks and for various Australian and English investments. One pleasingfeature is that the trend of interest rates is downward, and this may help to solve the problem of keeping the money in the country to develop our own natural resources.