VERGE OF BANKRUPTCY?

New Zealand Times, Volume XLIX, Issue 11194, 27 April 1922, Page 4

VERGE OF BANKRUPTCY?

MANY OF THE FARMERS INTERESTING DISCUSSION ON LAND VALUES. QUESTIONS IN ARBITRATION COURT. Many farmers are on the verge of bankruptcy, according to evidence given in the Arbitration Court yesterday afternoon by Mr W. D- Hunt. Mr Hunt was questioned at length by Mr J. McCombs, the principal representative of the employees. Mr McCombs asked if Mr Hunt was aware that the farmers approached Parliament last year and said that- their difficulty was that at tlie high prices they had to pay for land they could not make it jjay. . Mr Hunt: That is one of their difliMr McCombs: What caused tins increase in land values? Mr Hunt: There was no rise in value between the beginning of the war and the end of it. Tho great rise took place after the end of the war. That was caused partly by the Government purchasing eighteen to twenty millions of land for returned soldiers and upsetting the market; and a great deal of the rise was caused by the inflated value of all products in the world’* markets. CAPITALISING ON INFLATED VALUES. The president of the court (Air Jns« tioe Frazer): In other words, we have been capitalising on inflated values. Air McCombs: When did the Government start purchasing land? Air Hunt: They purchased a little during the war, but did not purchase on a large scale until after the war, abont 1917. Mr McCombs: Then why an increase in values from 228 millions to 251 millions before the Government came on the market at all? Mr Hunt: That might be Government taxation values, but not sale values. Mr McCombs: Would not the farmers be relieved best by a reduction in the value of land rather than by a reduction in the amount of wages? Mr Hunt: If jrou reduced the value of land below what it was in 1914, you would reduce production. Air McCombs: I cannot £ee that—same land, same productivity. IF VALUES FELL TOO LOW. Air Hunt: Aly reason is this. The lands of New Zealand vary enormously in quality and in climatic conditions. If we take our rich lands with good climates, their grazing capacity is the finest in the world. Nothing else anywhere can touch them. They graze stock in great quantities all the year round without any winter fCfed, and the only expense is that of looking after the stock. That land is very valuable. On other lands much money is needed for keeping down weeds and other growths and for winter feed. The point I wish to make is, that the land only rises in value because the profits are greater, and that enables other land to be brought into occupation. Every fall in land throws out of cultivation a great, deal ..of .second and third-class land- H oqr ,firs&cjass land became worth only £2O, then a great deal of our second and third-class land could not be occupied at all, and production would fall off. ' PAPER VALUES.

Mr Hunt said that at present there were really no land values. The president: No; they are paper values. Air Hunt: If the value of rich land was forced down to £2O an acre, the second and third-class land would have to go out of occupation. The president: That is that those that are on the margin would be forced over the margin.

Air AlcCombs: I don’t want to force down the value of land, but the prices. The president: Do the present prices of the land bear a correct relation to the present priceß obtained for the products of the land? Air Hunt: They did before the war, but if tlie present prices continue a great deal of New Zealand land will be worth nothing. The president: Who is buying land to-day ? Air Hunt: Generally the mortgagee. The president: Do you know of any sales that could be taken as a fairly good indication. Mr Hunt indicated that he conld not. The president: However, wo all agree that the present paper values are misleading. FUTURE PRICES. Air McCombs: The farmer haa to pay interest on those inflated values. His difficulty is not because of wages charges, but because of capital charges. Mr Hunt: The people who contracted to pay those high charges already have gone out. Mr AlcCombs: Not all. Air McCombs: You say the price of produce is fixed by the world’s markets. If that is so, how is a reduction of wages in New Zealand going t* affect the cost of living in New Zealand? Air Hunt: Because it will rednee th» cost of a number of services. Mr Bishop: Can you give any information as to the tendency of prices within the next twelve months. Mr Hunt: 'lt is more difficult to give it for twelve months than for a longertime abend, because things are so unsettled just now. If von take over a longer time, it is almost certain New Zealand prices will fall lower than they are to-day.