TO THE EDITOR.

Otago Witness, Issue 2116, 13 September 1894, Page 12

TO THE EDITOR.

Sir, — Your leading article in this morning's

paper clearly shows the financial rooks ahead of the country when its governors embark upon this wonderful scheme. The fact that the 1£ per cent, margin may be diminished by the 3£ per cent, loan having to be issued at a discount, the inevitable losses that will ensue on lending on a two-thirds basis of value, the strong temptation to favour supporters in the granting of mortgages, the universal and dearly bought experience of the dangers of leaseholds as mortgage investments, the creatien of a large staff of valuers and officials throughout the country, the less ef land tax— all -these point to disaster more or less as the unavoidable result.

And for what end ? To help the farmer is without doubt a most praiseworthy object, bat hay« all the poor farmer's troubles in recent years been occasioned by the pressure of the interest on his mortgage ? If we can give him better prices, seoure him more abundant harvest*, lighteii his ratei and taxes, then it might be worth while to run grave risks to accomplish snch objects. But to raise a ory about easing him ont of bis troubles by securing a alight reduction in his interest is but to delude him with a will-o'-the-wisp, and some day, when the losses incurred point to more taxation, while .he finds himself little benefited, he will have small cause to bless his deluders. The farmer who only occupies an ordinary leasehold, or who has a freehold unencumbered, will^derive no benefit from this scheme; the heavily involved farmer will probably be out of the reach of so paternal a Uoyermnent as the present one to assist him, while the help afforded to tho remaining farmers will be trivial. How many are in the position to borrow say £500, which on a 50 per 06a i, n5« S aßßumes the possession of a farm worth £1000 ; or on a 66f basis, £750 ? On a good security this -amount can be obtained through ordinary channels at from 6 to 6£ per cent., so that the saving of 1 or 1£ per cent, effected in this case amounts to the prodigious sum of £5 or £7 10a per annum. To the smaller settler tho saving will, of course, be so much less. All the borrowing, risk of loss, official machinery, &c., to be set in motion, and this it all that it is to effect ! It reminds me of nothing ao much as what is expressed in Pindar's lines — Bid ocean labour with tremendous roar lo heave a cockleshell upon the shore. Besides, in the ordinary course of things, the trend of the money market seems to be in the direction of lower rates of interest. At the recent Auckland loan conversion scheme a 5 per cent, loan waß absolutely rushed with applicants willing te pay a good premium for the investment, showing the large amount of money jajAUahl* jby JendinijjtjoroDjttiJa^wliiojL xatwJ

anJr&c.?*' P rovidin 8 the security be soodl-I Dunedin, September 5. Cosmos.