THE BASIS OF CONFIDENCE.

New Zealand Herald, Volume LXIX, Issue 21110, 18 February 1932, Page 12

THE BASIS OF CONFIDENCE.

Sir, —I desire to heartily endorse Mr. J, 1). McMillan's very ablo letter supporting the views expressed by Mr. Seaman in the Chamber of Commerce a few days ago. I have been urging upon tlio leaders of the Government that same course for the past twelve months, and, failing a reduction of interest have strongly advocated that at least all principal payments on amortised loans should be suspended for a few years and finally paid after the full term of mortgages expires. I have by me now a letter from a Minister of the Crown savins that it is now imperative that this should be done to ease the burden oji the primary producer. I am now sure, however, that this is not going far enough, and that a reduction of interest charges everywhere is absolutely essential to allow ft return to even comparative prosperity. We are •staggering under a huge national debt of over 250 millions, a large portion of it incurred during the wartime, and with our total revenue from all primary products cut in half wo cannot hope to go on paying tho same rate of interest at which the money was borrowed. A reduction of 1 per cent, would mean millions per annum, and 1 am sure that, an appeal to tho bondholders by the Government would bring a favourable response from a big majority of them and a reduction of 1 per cent, on all mortgages in New Zealand would just make the difference between success and failure in thousands of (,-isos. It's all very well to raise an outcry against, breach of contract, etc., but which is (he better, to break these contracts or to break a good many thousand farmers? Do those persons or lending institutions who -have advanced money in good times at 6 per cent, or over prefei; now to take over the farms rather than reduce the interest to 5 per cent ? lam quite sure they do not. They know full well that if the present experienced farmers cannot carry on and earn a, living and pay interest on present, produce prices that they, the lenders, cannot put on less experienced and less interested men as managers and make 5 per cent, out of it. In my opinion we cannot look for any substantial rise in values of butter, wool and meat in the world's markets, and, therefore, we have to pare down all costs to meet the lesser income, and (o cut out external borrowing entirely and live within the total income derived from our primary products, minerals, etc. I trust that Mr. Seaman's able, lead will bear fruit, and that, very soon, for the matter is very urgent,. C. H. Mellsop. Clevedon, February 14, 1932.