FARMERS' UNION.

Marlborough Express, Volume L, Issue 174, 25 July 1916, Page 3

FARMERS' UNION.

DOMINION CONFERENCE,

PRESIDENTIAL AD-DRESS

The annual Dominion Conference of the New Zealand Farmers' Union opened in Wellington to-day. The president (Sir J.--G. Wilson) delivered the following address:— , The year that is past has been a phenomenal one. How could it be otherwise? We are spending our capital at the rate of about a million a month, and yet have withdrawn 50,000 men from the adult population. Those left in, occupation an? therefore receiving more for their labor in whatever occupation they may he engaged. Great Britain js spending live millions a day, which is circulating amongst the people, yet overything we purchase costs more. Wool which was just sufficient for the wants of the world, is required everyt where, for those who nre fighting. Every pound we can. send Home is quickly being turned into , khaki or underclothing, for the soldier. The meat we produce goes now to feed the men at the front, and only the surplus goes into the ordinary channels. The consumption of cheese in .the Army has increased the demand enormously, and Is i)er pound has been reached as a selling price since tho freezing process enabled us to sell our produce in Britain. With such prices for our food and clothing products, all have to pay more to feed and clothe their families. Tho increase of non-interest-bearing deposits with the banks show that their clients are , holding reserves, but it is gratifying to note thai/ the worker is saving some of his increased returns, for during the war the Post Office Savings Banks show a net increase in the funds of over three millions since the war began; of this two millions is the increase during the past year. As our bills have reached such an enormous total we must expect further taxation to be a certainty. How is this to be raised?

The chairman of the Bank of New #ealjuid us v very cfirefTilly-pre-pareci review of the financial situation of the worid; though probably we did not agree with some of his conclusions. The Budget bristles! with figures, so I will take_ round .figm'es which bring,out the points of interest. First of ii.ll our exports have exceeded those of last year on paper by six millions. For the two years ending 31st March the exports were: — ,■'•■' '■■ .£'■■■■

1915-16 ... ... 33,108,069 1914-15 ... ... 27,153,947. £5,954,122 The difference, however, is very much exaggerated by the fact that in both ca^es these amounts are estimates. I ani sure that in 1914-15 the prices realised were nruch higher than the estim.atcs shown in the above figures. T should not be surprised if the difference an, actual. value of our. for the two years in question was in reality ' no more than £3,000,000. There must have been a' considerable difference in the estirflated and actual value in wool, nieat, butter, cheese, and hides.

Whether we'have been over sanguine in our estimates this year remains to bo seen; but it rhould be noted thatmuch of this last year's exports has yet to be paid for. ' .' ■ Of the £33,155,992 of exports, the produce from the land in the year ending 31st March, 1916, amounts to £'30.635,719—a truly stupendous amount for a million people to take from the land. Besides which -.the people have been fed, and to some extent clothed put of it. Practically tho Whole of this has been taken from the land, by cattle, and pigs—with the assistance of horses in trie agricultural portions. We may safely say, I think; -ihat not more than four millions at the outside is the result of war; Values have risen abov.e the previous year, but this has to be discounted by the fact that it has cost a great deal more to raise and market the prodnce; "hut we laave been decreasing 'pur imports in comparison to our spending power, although tho higher values bring tho total of last year to a little more than that of 1914-15. so that we have a margin of twelve millions of excess of exports in comparison to imports. This is shown in the. banking returns. There is an i increase of over four millions in non- ! interest-bearing deposits. " There are ! politicians; who say tho Government should take from the farmer tho extra six millions of increased value of exports which" he has not got, and thenineteen millions of free deposits to pay war expenses J The year's balancesheet in the Budget begins with a credit balance of £149.000, and ends with a surplus of £2,166,000. So Sir | Joseph Ward was-very near the mark when he said new taxation of last sos&iou would bring in £2,000,000. Who then paid this extra taxation?1 According to the Budget, Customs with the 1 per cent; primage duty has brought in £200,000; beer duty, £30,000, and presumably all pay towards these increases. Stamp and Death Duties are higher by about £53,000; Post and Telegraph, £336,500. Land and Income Tax, tho outcome. of increased rates, £1.102.516. Railways show as receipts £377,000 ?nore than the previous year. The total is £1,849,016. Most of this would be paid by those who also pay land and income taxes. All this is over and above the very large sxirn subscribed for war purposes and contributions to the Defence j Minister; stock for military purposes; ! patriotic funds; Red Cross; hospital \ ships, and the thousand and one things the. women of New. Zealand have produced, as well as relief funds raised in many ways. j When we turn to the taxation pro- j posals of the present war time it is certain that the burden of them is ! still further to be borne by the land. 1 Primary production is our only source of wealth. The winning of gold and coal is destructive production; once ; obtained, the products cannot be reproduced; agriculture, on the other hand, goes on while the world exists. The Government of the country and '.the safety of the individual shoxild bo insured by each paying a percentage of his earnings as they pass through bis hands. In our present case lam afraid that there will be many hardships, mostly amongst those of s .,the farming class, which are least able to bear them. In later years with the help of dairying many men have put their savings into land and assumed ; more than usual liabilities. The mort- j gage tax has now been altered so that j the income from this form of invest- j mont has to pay income tax. In small sums this will be a relief to the lender, but if the mortgage income comes under the graduated scale it may bo heavier, and thus tend to divert this, investment into other channels. The ! suggested legislation to restrict the j rate of interest would only hasten the ; diversion. When the time comes for ( renewal the second mortgages which so "many have will be called tip. and if the i*ate is fixod the mail will be forced to sell and the farmer will prftbuDJy lost his savings of a life-

time. He will be thrown again on tho labor market. Then ;igain in connection with the graduated jtax, there 13 now a certainty.of {V'largc amount of capital being taxed: twice. Tho Government has considei-ed .this unjust in xlie case of an income derived elsewlicre pnying taxes in the country of origin uhd here, as -well. Often we hear jr. the'debates in connection with this subject what is.being done by Mr McKenna-, the 'Gliaiipellor of tho Exchequer. Bufc it is, never pointed out that lie has pointedly'taken the 60 per cent, from business: and not from the producer—recognising that production is tho Jifo blond of. the, nation. In tho case of gradiuition-rrwhicli is now v^rY heiivy—the owner of the land pays graduated vixs. upon the total unimproved value of his land, viz.: his own intercut in ihe iand and. that of the mortgagees. , The mortgagee pays income tax, possibly at a graduated rate' upon the income derived from the same amount. Th\ts the capital as first taxed and the^jjio income from it. The farmer is alsj6 J first taxed upon his capital in .the land land then upon

; his income derived from it. Last year - when tho tax was a moderate amount* -—though it brought in a great deal '•; more than the estimate —the farmers, paid it cheerfully, but now that an J additional 5 per cent, is added to this 1 and a 45 per cent, tax on all profits I over a .certain percentage of return ! irom capital, it certainly is conscripting, wealth to a greater extent i.han anticipated. The 5 per cent, additional income tax should not have been imposed on them, although Avar profits when they can be fairly ascertained arc fair contributions towards the expenses of the war. What is to be the destination of these piled-up millions, however, is another point. It would certainly bo more reassuring if the additional millions were earmarked for the payment of the war debt we owe to the British Government so long as they were not. required far the expenses of our soldiers at the front. The taxation wouid thus go towards paying the expenses of the war. Sir Joseph Ward has specifically stated that the whole of this money invested in London will go to the payment of our war debts to tho British Government when tho time comes to square accounts. t It must be remembered that although the value of our products has gone up, the cost of production • and distribution, as well as improvements, have gone up by leaps. If the cost of living has gone up the farmer pays it : just the same as anyone else. One special feature is the remission of the 25 per cent, additional- graduated taxes on business"' premises. This so&mg unjust, though it""may be ex-: pedient. Land on wliich business* premises are built" is just as necessary for the making of an income in that business as the land is to the farmer to make his, and, moreover, in making up costs, business men in-1 elude all taxes and outgoings, and they are passed on to the purchaser. This is impossible in the case of the farmer. The. frusiness man can increase his accommodation by going up in the air-without further cost either in taxes or rates, on, the. land; but tho farmer is restricted to the area of his land; if.he improves it he pays more in taxes and fates. ; .

One'significant fact one cannot help noting that .during all the debates as to how the taxation should bo. imposed on others, there has not been a suggestion that any remission of/paymeut should be made either by Ministers ot Members. When, howover, all is said1 and done, however much hardship may result from taxation, ihe Government has had to deal with very exceptional circumstances, and although ,they have been squeezed unduly by some sections of the comnuraity into throwing the cost of the process on others, they must have the money,'' and I am sure all those who have to find it, \vill hope that it will be wisely and economically spent, and help to end the war in the only way in ivhieh the Empire will permit. . : • ' '• ; ' •• ; . ■■■■■'•

If we are to pay all this enormously increased taxation (and Sir Joseph Ward warns us we may have to pay more next year), what means-has th« country got to meet it?1 It must bfe remembered that the ".Excess Profits Tax" will vanish into thin air as soon as peace is. declared and prices resume tho normal, and. it is stated to be only for one year; we shall then have to meet the additional interest on all the money we have borrovyed for.war. purposes. At the least it will be 15 or I 20 millions, according to the lengtk^. of the war. Assuming that the surplus which the present taxation brings in goes towards repaying some of the millions borrowed at Home, that means tii-at our interest charges, even without a isinking fund, will amount to a million moro than is paid on oiu* oi'dinai-y debt This means that wemay look forward to paying-additional taxation in the future, and possibly with a much, ]ower level of prices:•; :lt: is quite clear thati if the produce pt the land is^3o-33rds of the exports of ! the Dominion, to restore the dissipated wealth of the world which has gone in this disastrous war, we in/ New Zealand must look to the pro-' duction of. the land to ag:iin create it. No power on this earth can. restore to us the fine young lives which have been voluntarily given, to allow us to retain, our liberty; but* as a monument to .'their,' self-sacrifice, I hope that when peace cqmes it. will mean industrial peace as well as; peace from war. ji that^is assured, by all,.'and we all ,<iet resqlute-ly^ to work to: increase production with due economy, I have no doubt that before another decade is over we shall have; accomplished great things. The Dominion, however, will have to rely upon the land to d9.this, and it certainly would be delayed' and much harm done if the cry of ' 'tax the land" which frora a class of the 'coniniunity is so oftenheard, were listened to by our politicians, and undue taxation is"tlevied inconsequence* How, then, are we to increase the production? For the present there is• much more need of increasing_tHe out-, put from the land in occupation than there is for further settlement. That will come in ..due time; we want "well directed labor" on the land! if we are to turn out more produce. First, it. is clear that the country must be made as attractive as possible. Man is a gregarious animal, and does not require much encouragement to re r main in'towns; yet those.who love the country and the life there, wonder what attraction there is in town life, which holds them in its grip. I think we are all awakening to the fact that if we wish to remain in the country we must interest them in counti'y pursuits and life, wliile they are young. • When I look back upon the time the Farmers'; Union first took up the subject of Rural Education and .vocational-'. training, % about: 1902, ami uoto the advance which has been made, I think it is something to be proud of that the Union, has assisted in that progi-ess. - •.;'.■';. It has been recently arranged at Ashburton, with the governors of the High School, that a reserve belonging to them should be worked by the Agricultural Department, but that the boys under a science master or the High School should have plots on the same ground, worked in conjunction with the Agricultural ~ Department. Much, however, remains to be done, and we.have only ..touched the fringe of vocational education. The progress in rural education, while helpful, is not sufficient to imr.iediately restore'the lost wealth to the''country. It is the pi-esent day farmer who must do that. Talking of wheat-growing, one Labor member was reported to have said1 that it was the duty of Government to force the farmers'to grow wheat. What ? a curious commentary on a members knowledge! It is a fact which, has been proved that with wheat at, 5s it takes "from 23 to 25 bushels to pay expenses. Anything under • that is grown at a loss to the farmer. The country is poorer if the farmer loses by the* transaction. For the moment the people may got cheaper flour; but

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