AID FOR THE FARMERS

New Zealand Herald, Volume LXX, Issue 21398, 24 January 1933, Page 13

AID FOR THE FARMERS

Sir, —The plight of the New Zealand farmer cannot bo solved by the raising of the exchange. No doubt everybody will recognise that the farmer is the mainstay of tho country, and I do not think anybody will object to any schemes that are intended to put tho farmer on a solid footing. Tho prices of our primary products are ruled by demand and supply, and no artificial interference will alter this recognised law; tho only way by which we can assist tho farmer is by helping him to cut down his overhead. Past Governments aro largely to be blamed for raising the values of our farming land to artificial levels, and these must bo brought down to such a point that tho farmer can make both ends meet at to-day's world prices for our produce. The mortgagee will have to suffer; but of what good aro mortgages that do not produce any interest'! The mortgages in this country amount in all to about 115 million pounds, of which, to take a very high estimate, about 60 millions are beyond tho interest-producing capacity of tho farmlands. These could probably be acquired at 10s in the pound, which again is a high estimate, as a good many could be acquired at 5s in tho pound. Taking 10s in the pound as being the highest amount required, it.would take 30 million pounds to acquire these mortgages. I proposed to the Government some six months ago that it should issue Treasury notes for this amount; but was told that this would be inflation, and nothing in tho world seemed to convince tho Cabinet that the plan suggested is not inflation, but sound deflation; you cannot cure inflation with further inflation, as proposed in this juggling with exchange; if that was any good, why not raise it by 100 per cent ? The wealth of tho country is made up by the aggregate wealth of the individuals residing in tho country, and if you reduce the wealth of the individuals by 30 million pounds, it is clearly deflation and not inflation. ]n order that tho present generation should not bear all tho burden, I proposed that the Treasury notes (in bank note form) which would bo made legal tender, should bo redeemable by 1-50, i.e., £600,000, per annum, thus spreading the redemption over 50 years. Its practical application would be put into action in the following mariner:—The farmer Avould give a Crown mortgage back only for the actual amount at which his mortgage had been bought; he would pay no interest on this Crown mortgage, which would contain a redemption clause to the effect that if wool or butter (sheep or dairy farmer) rises by Id per lb. above to-day's prices, he would pay capital redemption; on a rise of 2d, he would pay jjtd, and so on. In order to prevent any wild speculation, there would also be a clause that in tho event of a property sale, half of this Crown mortgage would have to be paid in cash by the purchaser. The aim is to create a satisfied farmer, not to encourage wild speculation. The Crown mortgages would be the assets against which the Treasury notes would bo issued. The next point raised was, who would have to pay the £600,000 per annum if the prices of outproduce did not rise, or did not rise sufficient to produce the £600,000. My answer to that is that tho £600,000 would have to ba provided for in the Budget and the general taxpayer would havo to look upon it as an insurance premium against losing all ho has at stako in this country. There can bo no doubt in tho mind of any thinking man that our farm land values aro absurd. Land is only worth what it produces and values will have to be brought into line, with tho result that can be obtained from it. My schemo would create a contented farmer, who would bo able to see a silver lining ahead, whereas at present he is full of despair. No doubt the cry will bo raised: "This is nothing but class legislation," but I ask: Is not every legislation moro or less class legislation ? Every legislation will affect tJie various classes in different ways; but I think that when it is considered that we aro indebted for seveneighths of our income to the farming community, nobody will seriously object. H. REHIEBB.