BANKS AND HIGH LAND VALUES

New Zealand Herald, Volume LXX, Issue 21641, 6 November 1933, Page 13

BANKS AND HIGH LAND VALUES

Sir, —When speaking on the Reserve Bank Bill, Mr. Forbes is reported to have stated that "Had the Reserve Bank been in existence during the boom period there would never have been the high prices which were paid for land." No greater mis-state-ment has been uttered by a responsible public man, and ho failed to show how the Reserve Bank could have prevented the rise in land values. The cause of the rise rested entirely with the Government. When the war started the farmers were at their wits' end to know what was to becomo of their produce—how were they to get it to their only market, Britain. The Government, lacking statesmanship and foresight, could not give them a lead or any satisfaction until the British Government had announced they would require everything we could produce. Even then the Government had their final opportunity to prevent abnormal rises in land values by guaranteeing the farmer the price he was then receiving for produce for the duration of the war. Had they done this the farmers would have been extremely grateful and fallen on tho Government's neck, regarding it an their saviour. Tho Government would then have had tho difference between the then current price of about Is 3d a pound for butter-fat and 2s 6d a pound, which was eventually paid, to help pay war costs, and land would not have been beyond a price at which it would pay at Is 3d a pound. Tho Government alone was responsible for • the high values. The banks had nothing whatever to do with it, neither was tho farmer responsible. Ho was compelled to buy at market values based on tho current price of produce and tho law of supply and demand; he could do nothing else. Justice.;