FINANCIAL STRINGENCY

Otago Daily Times, Issue 14382, 27 November 1908, Page 7

FINANCIAL STRINGENCY

WITHDRAWAL OF FOREIGN CAPITAL. AMENDMENT OF THE LAW -SUGGESTED. (P«a TJkitid. Press Association.) , NAPIER, November 26. 'At the annual meeting of the'-Napier Chamber of Commerce, to-day the President (Mr C. Ellison),\ in his address, made reference to the financial stringency, arid said: "So far as my observations go, I believe that this has been most pronounced in .the direction of,loans on mortgage. What caused the financial Stringency, and when it will end, are questions which have been widely-, discussed, without throwing much light upon the matter. One factor which I think has been overlooked is the withdrawal from the Dominion of practicallv all the bona-fide mortgage, companies, which have Wen driveii out as'the "result of-the operation of tile Advances to Settlers Act, it being impossible for tliem to compete with an institution which is exempt from mortgage tax, which they had to pay. Ju this distract alone . three companies, the investments of' which amounted to considerably,, over,; £1,000,000, • have been wound up, and in other part* of the Dominion - the s&«:e' has lias occurred, and on. a much larger scale. The low rates of interest introduced by the, Advances to /Settlers Act doubtless contributed largely to. the. industrial activity of the past few years, but when wo bear in miiid the following facts:—(l) the depreciation, in income it causes to Widows and all those! dependent on the interest derived from investments; (2) the fact that it inflated the value of ; land without increasing its producing capacity; and (3) the present scarcity of mopey for loan purposes, caused by the withdrawal of all mortgage .companies, and an annual loss of, say, £15,000 'for,mortgage tax, it becomos 'a question for consideration whether this much applauded act is an unmixed blessing." Mr Ellison went on to fexpress the opinion that the mortgage tax-should be abolished, and foreign capital,- allowed to compete on equal terms with the Government department; In conclusion, lie said: " Coming home to our ownselves—while one ' must admit the scarcity of money arid a certain amount of overtrading, I am satisfied tkt the bulk of the fanping. and trading concerns'of the province are sound, and I hope soon, therefore,'to, see, business resutne its riorm&l,.conditions. It, is pleasing to record that the frozen meat market is steady ; and that the dairy industry doing welj.. - There are also signs that the wool market is on the up grade." , The address did iiot evoke any discussion.