DEARER MONEY.

Northern Advocate, 25 June 1920, Page 4

DEARER MONEY.

GOLD mini: WANTED

TO RUN NEW ZEALAND,

All over the world money is hardening, due primarily to legitimate trade requirements and to tho capital require.! for reconstruction purposes, and those who arc in need find thornsolves in competition with others and must offer a higher Kite to obtain what they want (says the "Mercantile Gazette" editorially). This country, in common with others, will meet an advanced rate in the very near future. To us in Now Zealand everything doponds upon how far ,>riees fov our products will recede. That they will do so is certain, as wo aro hampered with the difficulty of marketing,' and that will remain until tho shipping control terminates; and as Ihe market in England cannot rely upon continuous and regular supplies from the Dominion, buyers there look for other sources of supply, and our moat, butter, and cheese are liable to arrive, at times when there is a scarcity or a. plethora, as the case may bo, and sellers must

accept the consequences. Given a regular supply of shipping, so that our products can arrive at schedule dates, wo can look for a f.v.rly fixed but lower price TOte, which can be ascertained prior to contracts 'icing entered into here. But whether shipping conditions are improved oi not, producers here must rest assured that the days of highly inflated prices have gone. During the war the British Government, very rightly, had but one end in view, to

win; to that everything was subordinated and what they had to pay in order to attain victory did not count, and for that reason they commandeered our products, but in doing so drove no niggardly bargain with those whose goods they requisitioned. Now 1 hose days are over, the prices which have been obtained no longer can be looked fon. Instead of a customer who would have our goods regardless of price, our farming exporters must sell in the Open market and take whatever prices am obtainable.

MARKET STILi. PAYABLE

That ou rprimary products will still find a market at payable rates is beyond any doubt, as people must have food and clothing, and when land recedes from the present fictitious values, those who are engaged in farming will find they will obtain, not perhaps as high returns as in the past, but sufficiently satisfactory to make their investments perfectly found. Two things ..will tend to bring back farming land to its correct value: land will produce less per acre than it did.under the commandeer, and interest will harden; it may be also that a further adverse factor will intrude itself in the shape of wages and labour. The Finance Minister will find a substantial decrease in his income tax assessments, as, although the fawner h.is gained substantially through the increased value of his land not having been brought into account against him for taxation purposes, he has contribute! his share of income tax. If he now obtains diminished returns from his business, his cheques to the Income Tax Commissioner will be less for so long as he pays land tax on the values of years ago. How the Treasurer intends to meet the deficit on income tax which must infallibly take place we do not know, or how he will be able to borrow money at 5 per cent, when the market is going against him remains to be seen. Money is like any other commodity which depends upon the laws of supply and demand, and cannot be obtained unless the buyer will pay the market rate. So far as we can see, Mr Massey will require a gold mine at his command from which to draw supplies; from every point sturdy suppliants are framing demands upon the public purse, the employees of the Government are making demands for millions, the military party apparently mean to annex a large portion of the country's income, railways and public works must be carried on and, let us hope, completed, while administration charges are soaring. We had 100,000 men in the field during the war and the country accepted the expense of keeping them there without a murmur, but it looks now as if our expenditure will be none the less in peace than it was in war. *>

REGARDING THE LOAN. In Britain the Chancellor is payingoil' debts and the sacrifice the people there are making is producing beneficent results, as indebtedness is being substantially reduced; here the converse is taking place —taxation is almost the heaviest in the world and our liabilities arc increasing. What is wanted is that expenditure shall be decreased in every department, that the Government should at once free trade and commerce from til restrictions and permit the business of the country to be handled by those who understand it, and that the Government should confine itself to those matters only which properly fall within the ambit of its functions. With regard to the loan of £2,000,000 that must be found by the wealthy classes and by trading companies, the rank and file will contribute but a very small percentage. But, unfortunately for the wealthier class, the loan presents nothing attractive. Take, for--instance, any of the large institu-tions—-the Banks, Public Trust Office, Government Life Insurance Department, r.nd the big mercantile concerns, the pastornlist or farmer: these are all paying 37 per cent, of their income to the Tax Commissionci' already, and Mr'Massev's f> per cent, loan to them will return £o 4s 9d only per cent. This is not nu investment for which any business man will find money except under

compulsion, and we think better terms should have been offered. Sir Joseph Ward knew more about finance than does any member of the. present Government ,and he displayed groat judgment v, hen he kept the interest rate to 'U per cent, free of income tax. He was strong enough to ignore the protests of those who have notlurg to lend, and by so doing got the money he required without raising the late of interest all sound. Mr Massey has almost insuperable difficulties to contend against, clamant demands for increased'expenditure, a 11.1 a limited revenue. For the

present position Mr Massey is no more to blame than wo are, but it will require a brilliant financier to so adjust taxation and the finance of the Dominion thai business men will not have all enterprise knocked out of them and prefer to pull out rather than continue in business. We should suggest that the first thing required is a drastic cuttingdown of all unnecessary expenditure; if that were done people would more willingly subscribe to any loan; as it is, most people think that moneys lent to the Government will be frittered

away iv useless and unnecessary expen-

ditmie.