The Temuka Leader SATURDAY, DECEMBER 17, 1932. Mr Wilkinson’s Plan

Temuka Leader, Issue 10224, 17 December 1932, Page 4

The Temuka Leader SATURDAY, DECEMBER 17, 1932. Mr Wilkinson’s Plan

jyjß. Wilkinson's plan for the relief of the primary producer in New Zealand aspires both to a remedy for the present situation and d guiding policy in the future. Recognising that the greatest burden upon the primary producer is interest* rent and taxation, Mr. Wilkinson proposes that farmers should he relieved of their total mortgage liability, which should be taken over by the State- and that the State should issue interest bearing bonds to mortgagees on the value of the mortgages adjusted to an index of export prices. For the capital liability undertaken, the State should be recompensed by the acquisition of land, without payment, on the basis of the amount of mortgage debt remitted, and that laud devoted to further settlement. The interest liability, which Mr. Wilkinson estimates would not exceed Hi,ooo-000 annually, could he recovered from special taxes on. fanners with generl taxation to make-up the balance. • To use Mr. "Wilkinson’s own words, the plan, is ‘"nothing short of revolutionary. 7 ’ It cuts right across accepted or familial 1 ideas of farm finance, and would certainly have far-reaching effects in operation. Up to the present only the barest details have been published, and, pending a fuller outline with the mature consideration which Mr. Wilkinson. must have given the scheme, detailed comment would be premature. However* attention can safely lie called to one or two points. One of the main causes of the economic troubles of the Dominions is the rigidity of internal costs in the face of the fall in overseas prices. Mr. "Wilkinson's plan seeks to remedy this position by making provision for one class of costs —farm mortgages —to fluctuate in - sympathy with export prices. Primary products, however,' fluctuate in * prices more violently than the prices of other goods, and consequently the export price index is not a suitable absolute index for the regulation of internal conditions. Some elasticity of adjustment is desirable, but not to the degree entailed by conformity to the fluctuations in export prices. For the same reason it would not he advisable to make internal adjustments, in successive .years, but rather to adopt, say, a three-year moving average. This would tend to smooth out violent movements. Another point which the plan suggests is that the liability of farm mortgages to periodical adjustment makes such investment a speculation. This will not be without its effect on the volume of money available for farm finance. These are points in.which we await further information when a fuller account of the plan is available.