ECONOMIC PROBLEMS.

Southland Times, Issue 20043, 3 December 1926, Page 5

ECONOMIC PROBLEMS.

To the Editor.

Sir, It seems to me that some correspondents have laid undue stress on this, that, or the other thing as the panacea or cure-all for the farmers’ troubles. I think a combination of partial remedies would be more effective. They might be summed up in all-round co-operation, concession and compromise. As individuals, organisations and classes we are ft>o prone to be selfish, both in theory and practice. When the balance of trade was much against us, there was a cry for “more production.” As most of our exports were primary products of the soil, I think the call was meant chiefly for the farmers. I do not think it fair that the tillers of the soil should be called on to increase our exports while the imports, including luxuries, are largely uncontrolled. Why should farmers be expected to counterbalance the mania for the importation of all sorts of motors, costly wearing apparel, etc? Again, why should farmers produce more of fines on which they make no t, or even loss, through costs of production? If the primary producers cannot by strenuous efforts keep the balance of trade right, let the importers curb their desires. I think there is greater need for increase in quality than in quantity of our products. While not in favour of “less production” as e motto, I am against increase by methods detrimental to quality. For instance, top-dressing has been much in vogue lately for enrichment of pastures, but already some artificial manures are under suspicion of being the indirect cause of trouble in dairy factories, and of

mortality among lambs. More production in such ways would be a doubtful benefit. Another suggested remedy is tYat the vendor should reduce" the agreed upon price for land to the extent that the purchaser could get a satisfactory profit on his operations. Such a concession would be all right provided that the purchaser was deserving and the vendor able and willing to make the reduction, but there is no compulsion in the matter. Some farmers who bought land cheaply before the boom and used it well were on velvet when peak prices came, but I never heard of one who shared with the original vendor the profits accruing from boom prices. Neither is the purchaser legally entitled to a reduction when land values fall. When the Government found that much of the land bought for soldiers’ settlements was too dear, it did not coerce the vendors to reduce the prices legally contracted for. Apart from the harm done by land agents and speculators, there have been genuine cases of contracts to purchase which have been bad for both vendor and purchaser. Many persons who deserved retirement, and thought they could afford it on the strength of a legal contract, have had their farms thrown back op them, and been placed in very awkward positions. A legal contract should be more than “a scrap of paper.” We may have reduction of price by concession, not compulsion. Besides, the Hon. A. D. McLeod, who should know, has stated publicly that many of the farmers in trouble had freehold before xthe boom. He has stressed costs of production other than the price of land.

Some persons think that greater financial facilities would help struggling farmers on to their feet. A reduction of interest charges would help, but the chance to borrow money easily would be a very questionable benefit. It would have to be paid back sooner or later. Much has been said about farmers having paid too much per acre for their land, but the trouble in many cases is that the purchasing for the most part was done on paper only. The deposits were often absurdly small. When peak prices were going, many men w’ith insufficient means were smitten with a craze for land. They seemed to think that if only they could get a footing on it their fortunes would be made. They have been sadly disillusioned. Financial facilities in the shape of long-term mortgages proved bad for them. In many cases buyers would have come out right if they had possessed the whole or most of the purchase money instead of only a fraction. Even £lOO for annual instalment of purchase money and a like sum for interest make a big hole- in the gross income from a farm. £6 per cent, interest on a mortgage may*seem high, but I believe it is less than the banks charge for overdrafts and stock firms for financial accomodation. When we consider the high salaries of bank officials, the big dividends for shareholders, and the costly buildings, we get some light on why there is such a difference "between the interest paid to depositors and that charged on overdrafts or mortgages. It would be better for the community if those w’ho score off banking business could be induced to be more easily satisfied when times are hard on the primary producers. Something the same might be said of the big commercial firms. Here again we are up against self-interest.

“Suum Cuique” Is a strong opponent of protective duties. Of course they hit a great many people, probably more than they benefit, and the farmer most of all. However, I doubt if their abolition would make such a great difference as he supposes to the man on the land. It is a very difficult problem. Proprietors of certain industries declare that owing to the compulsory award rates they have to pay their employees they cannot carry on against importations in their lines unless they get protection by way of customs duties. So they get protection, and the community increased cost of livirtg. There is a close connection between protection and the Arbitration Court awards and the matter of compulsory rates of pay and preference to unionists bristles with difficulties. I never could see why unionists should get preference over equally good freemen. As I tried to show in my first letter, compulsory high wages tend to keep up the cost of living. This is a point which unionists cannot or will not see. Differentiation in pay according to a man’s circumstances and responsibilities would help a bit, but those asked to take less would strenuously object. However, if women are not given equal pay with men for equal work why should irresponsible men get equal pay with heads of families? These need what they get, but plenty of men do not need more than half what they get, and often squander the surplus. Concessions in such matters would ultimately benefit all concerned. Men on high salaries and professionals whose charges are notoriously dear could surely afford a reduction in present circumstances. When farmers prosper, the towns benefit; when they are depressed the depression will permeate the community.—l am, etc.,

OLD HAND.