THE DEPRESSION.

Lyttelton Times, Volume LXI, Issue 7228, 30 April 1884, Page 6

THE DEPRESSION.

TO THE EMTOXJ. Sie, —On all sides people are heard bemoaning, and with reason, the present depression. It is also said that the country will never have a period of prosperity again. Now, I quite acknowledge that there is a great depression, and that it presses hardly on the community at present. What I wish to try to show is i that it is essentially of a temporary character, and that eventually the country will again be prosperous. It will, I think, be generally conceded that the three products on which our prosperity mainly depends are grain, wool, and meat. Of these meat is the only one which is at present higher in price than it has been on an average for the last ten years. Wool and grain are both low. It is said, and apparently with reason, that for a great many years to come their prices will continue low, owing to the fact that during the last few years their production has largely increased all over the world. In consequence, those who are paying high rents, or who are heavily mortgaged, cannot make a profit. Now, what will happen in such cases ? The landlord, unable to get his present rent, will be obliged to lower it. The mortgagee, not being paid his interest, will either have to enter into possession, sell, or accept a reduced interest. In any case the tendency will be to so reduce rent that the farmer can make a profit, and in the case of mortgaged land to eventually leave the person working it in a position in which he will also be able to make a profit. Let me illustrate my meaning; the figures are merely for the sake of argument. Assume —Wheat worth 3s per bushel; a farm capable of £ rowing 20 bushels to the acre 5 expense of producing this 20 bushels, 40s. In this case the farmer will have 20s clear. Now, if he is paying 20s per acre, it is obvious he cannot make any profit, and either his rent has to be lowered, or his landlord re-enters and lets to someone else at a reduced rent. That someone else will then be able to make his profit. Or, if he is paying interest on a mortgage of 20s per acre, he will either have to give up possession, have his land sold by the mortgagee, or pay a reduced interest. I quite acknowledge that the depression in these cases will affect most injuriously those who have not got a sufficient margin, but what I contend is that the tendency will be to drive those who have not got a sufficient margin out, and admit others. Further, some land will not he able to be used for wheat growing, even if freehold. I mean, taking my former figures, that land which will only produce sufficient wheat to, at the assumed price of 3s per bushel, pay working expenses, will be used as pasture land; a less return will be got from it, but still something, and eventually it will come into the bauds of someone who will be able to make it pay a reasonable profit on what he has given for it. In brief, what I contend is this: landlords will lose a portion of their rents, mortgagors will, to some extent, lose their land, and some mortgagees will lose either part of their principal or interest, but that, eventually, these things will adjust themselves and the country will again be prosperous. Of course this is small consolation to those whp are in difficulties, but I only wished to contend against the view that the country, as a whole, would not recover.—l am, &c., EXPECTANS.