CORRESPONDENCE

Taranaki Daily News, 5 December 1930, Page 14

CORRESPONDENCE

TIME TO FACE . THE FACTS. i (To the Editor.) Sir, —Your correspondent “Old Farmer” is much concerned about the primary producer being hit by the presentprices and suggests a moratorium. A moratorium would prevent the mortgagee calling up the principal so long as the interest is paid, but if tlie interest is not paid it would make no difference, as the mortgagee would exercise his power of sale contained in the mortgage. I think we should get down to facts and face the position squarely. First and foremost we must not lose sight of the fact that foodstuffs are down to pre-war prices in England, so we can only expect pre-war prices for the foodstuffs produced in New Zealand providing the quality is equal to that in 1913. If the quality is below the 1913 standard we must expect the consequences. The farmer would have been in a better position if the 1922 slump had lasted for three, years in order to bring things down to bedrock. As it is we still have to face the position, and it is no use bolstering things up again to have a renewal of the trouble in five or six years. Our trouble is that everything is overcapitalised and must be .written down, and if the mortgagee and farmer cannot do their part the present conditions will do it for them. A reduction in the rate of interest will not settle it, as it would only help to keep things over-capitalised and the mortgagee would be able to- raise the rate of interest at any time and the farmer would have to go without a fall in prices. If we get the capital down-so. th.at the farmer can pay/his way .thelaw of supply and demand will operate and the rate of interest' will.fall. but. while the demand for money is greateithan ..the supply the rate, must remain.: as at present.—-I am,' etc., \ ; . ’< ... .-/. ’ ? < .• HANDY MAN..