THE PAST, PRESENT AND FUTURE

Taranaki Daily News, 30 January 1931, Page 12

THE PAST, PRESENT AND FUTURE

(To the Editor.) Sir, —When the pioneers took up land in this district they bought it between 30s and £3 per acre. They worked hard and received 4d per lb. for their butter. Many of them had to work on the roads or at, a sawmill during the day and milk a few cows before and after work and fall the bush on their sections in the evenings or on holidays. The refrigerator came as a gift from the gods and prices for primary products gradually rose until in 1901 they received 9fd for. butter-fat. The following table giving the prices paid out for butter-fat by dairy companies of New Zealand is rather interesting:—

The above table shows that prices went up steadily from 1901 until. 1914. The year 1914-15 brought a rise of 4d per lb. and a definite rise in each year until .1921. 1 The man who had a farm in 1914 received the good prices during the war and was able to sell his farm based on wood prices, obtaining as a deposit more than he put in and leaving a big mortgage on the farm. Many farms were sold more than onee between 1914 and 1921, each time at an advanced price. When a place was sold the seller usually wot a deposit of more than he had put in and left his profit or unearned increment on the farm as a mortgage. Some of the mortgages have been renewed and others have been paid off bv raising the money elsewhere. When in 1915 the price of butter-fat rose to ISJd the farmer received 4d per lb. more than he received the year before, but did not raise th" working man’s wages, therefore the worker had to pay more for his necessities and. receiving the same wages,, was at a d.sadiaiitage. This continued for a season, and eventually wages went up. Butter-fat rose again the next season, but not wages, but in 1918 there was another rise of 3<' per lb. for butter-fat, and as prices for all commodities had risen another rise for the worker had to take place. From then on prices rose until the peak was reached in 1921.

During the "period 1917-19'21 many had botTght more land and mortgaged their holdings to get the necessary deposit on the land they intended to buy. The war was over and soldiers were looking for an opportunity to settle down. The farmers were looking for returned soldiers or anyone else who had cash to purchase their farms at the exorbitant prices ruling at the time.

The Government appointed Land Purchase Boards to inspect, and report on the advisability of purchasing land offering to settle returned soldiers. The land was bought at tuling prices on the recommendations of Land Purchase Boards, which were mostly composed of optimistic men. Some of the. soldiers made private purchases and were wuided. by the purchases of men who remained on farms during the war. lu 1921-22 a decided drop in the price for primary products was experienced and many were unable to meet interest bn mortgages. In some cases the mortgagee met the mortgagor with a reduction of capital, and others gave a rebate of the interest, but. in many cases the mortgagee would not give any consideration. In some cases the farmer sold the heifers he had for replacements to make up his interest. Some of them who were able to realise op heifers or other stock weathered the slump and are on their farms to-day, and are in trouble again. The slump lasted only one year and prices rose again, which has enabled most of. them to retain their holdings, only to meet the same trouble with eight years gone.. Buildings have been erected on high-priced labour and material, and the same applies to roads and railways. In lookin o- over the past it is easy to see mistakes. Now we find foodstuffs in England down to 1913 prices, so there does not seem much chance of a rise for primary products in the near future and it looks as if we will have to settle down and accept 1913 prices (cheese 13.25 d, butter 12.02 d) when normal is reached. Prices for butter and cheese are below normal at present, and farm land carrying mortgages up to £BO per acre. Interest rates have been forced up owing to the extraordinary dr land for money. Wages are high when compared with prices for primary products. Good roads nave been built on borrowed money, which is really a first charge on the land, and some of the farmers are asking to have their farms de-rated in order to lie able to pay the mortgagee a little more, and seem to lose sight of the fact that centralisation of control would not be in the interests of the man in the country districts. Expensive public body schemes have been carried out on highpriced labour and material. House rents and shop rents are high owing to the high cost of building. Many a farmer is°looking for any young man who will buy his farm and enable him to collect his life's savings and hand over a farm that is not worth half the price of the mortgages on it. (Surely a great legacy for the rising generation). Farmers do not know whether they will be able to retain their farms, business is stagnant, is rife and wages held up by awards. Prospects in the near future do not appear rosy and a period of deflation is ahead. The farmer cannot be expected to pay his way, which will make it bad for all. The secondary industries will not be able to employ at award rates and will be compelled to dispense with their employees. ■ Farmers will dispense with their employees as soon rs they can be done without. Employees will eventually see the folly of high award rates and ask for a reduction to allow them to be employed and earn an honest living. Farmers will blame except themselves for their position, and will be brought to realise it when they default with their interest and receive the usual “two months’ notice” from the mortgagee that he intends to exercise his power of sale. The last mortgagee will take over the farm after the necessary expense and carry it on until he is unable to meet the interest to the prior mortgagee, who will carry out the same procedure. This sort of thing will continue until values are adjusted to a payable level,, and while it goes on everybody will have to suffer. The same will apply to town properties owing to unemployment. The farmer, not being able to pay his way, will be a constant drain on the business man, who will have to make losses, and many will have to close lip altogether. We have plenty of boys who would take up farming, but have nothing to offer them except ruination, and nobody can advise them to become primary producers.' (It is human nature for young men to go where the best opportunities are offering). There are two ways a proper level can be reached, viz., (1) to let everything find its own level; (2) to study economic law, select a date and make adjustments without fear or favour. To adopt the former would take years, and during the time it was going on the country would be in a worse state than at present. Land values would be readjusted by one man ruining another, wasting mopey- in the process, only to be ruined himself later on. Business firms would have to give extended credit to customers until they could not go further, and when, the farmer went bankrupt he would pull the business man down with him. A' reduction in wages will come, brought about by unemployment. The rate of interest, will remain high owing to the excessive demand for money. The cost of living will be reduced slightly piece bv piece until it finds a level. Some will have to live on 10s per day before the cost of living comes down, and will therefore have a lower standard of living. This method will mean straitened circumstances for every farmer and working man in the country for several years. To adopt the latter method it would be necessary to select a date in the near future and make adjustments all round as from the selected date. Mortgages on farms and other properties would be put into the' following categories: (I) Mortgages that will bear interest on current prices after- allowing for reasonable working expenses; (2) mortgages that will bear interest on average production and normal prices after allowing for working expenses; (3) mortgages that will bear interest on average production and normal prices. Interest will be paid on mortgages that will bear interest on current prices. Mortgages that will bear interest on normal prices and average production, but will not bear interest on current prices, would remain dormant until prices return to normal. Mortgages that will not bear interest on average production and normal prices would be written off, with no exceptions. A Government valuation would be put on all farm lands, based on average production and normal prices, with consideration for buildings, and no mortgage allowed over the valuation. Mortgagees and mortgagors would have a settlement on the above lines before th'< date selected or it would be : settled for them.

Arbitration Court awards would have to be reviewed and wages reduced as from the date selected; rents to be reduced on farms, houses and business premises; overhaul of the Public Service; stabilisation of land values; unemployment money to be spent on land settlement. By adopting the latter method the farmer would be put on a reasonable footing as from the selected date and would be able to keep up production. The cost of living would fall, as everything would be produced cheaper and selling costs would be lower. With a reduction of rents and the lower coat of commodities it would be possible to live as well on 10s per day as on 14s under present conditions. The money spent on land settlement-would help to solve the unemployment problem and men would not become unemployed year after year. Stabilisation of land values would inspire confidence in the future, prevent a recurrence of land gambling, provide prospects for farmers and future farmers, act as a guide to land

buyers and inspire confidence to investors. With the farmer on a proper basis he would be able to employ, which would materially help to .solve the unemployment question. He would pay his way and not require an overdraft. The grocer would be paid for the goods he sells, likewise the butcher and baker; they too would not require an overdraft, which would help to lower the cost of commodities, and, as there would be little demand for money, the rate of interest would automatically fall. When conditions were suitable we would be able to re-finance some of our public body loans, on which .we are paying a high rate of interest.—l am, etc., \ ' HANDY MAN.

Year. Cheese. Butter. JQ01-2 ..... 9.25 9.80 ]002-3 '..... 10.30 9.00 1003-4 ..... 9.50 7.89 1904-5 ..... 9.00 9.64 1905 -6 12.00 10.38 J906-7 12.82 10.96 1907-R ..... H-92 10.28 1908-9 12.92 10.28 1909-10 12.05 11.16 1910-11 11.95 10.52 1911-12 14.59 12.16 1912-13 13.25 12.02 ' 1913-14 14.38 12.00 1914-15 ..... 18.38 13.81 1915-16 19.87 16.82 1916-17 ..... 19.50 17.00 1917-18 ..... 22.25 25.56 1518-19 24.62 19.11 1919-20 ..... 25.20 20.00 1920-21 29.37 33.00 1921-22 18.00 16.50 1922-23 . .. .. 21.50 19.50 1923-°4 2.... 17.75 18.50 1924-' 7 5 18.50 18.75 19.75 18.61 1926-27 15.00 15.27 1937-28 19.00 17.12 1928-29 19.50 18.25