ASSISTING FARMERS.

Star (Christchurch), Issue 16820, 24 August 1922, Page 3

ASSISTING FARMERS.

BURDEN OF INTEREST RATES. “Tliis matter is at the base of the peace and prosperity of the Dominion of New Zealand,” said Mr D. Bates, at the meeting yesterday afternoon of the North Canterbury Provincial Executive of the New Zealand f-armeis Union, in tabling a motion advocating the raising of a loan to assist farmers of approved financial stability. Air Bates moved:—“That the attention of the Legislature be called to the distressful conditions caused by the attempt at rapid deflation by the severe conditions and onerous restrictions of credit imposed hv banking corporations. Such distress is evidenced by numerous bankruptcies and unemployment. This executive desires to recall the fact that it warned the Legislature two years ago, and again a. year ago, against the direful effects of too rapid deflation, and by suggesting that the banking corporations should be placed under the moratorium as regards past advances. This executive again desires to warn the Legislature that a political as well as an ecouomic crisis may result unless it forthwith intervenes. This executive petitions the Government that at the first favourable opportunity a loan bo floated so that farmers of approved financial stability should secure advances at a reasonable rate of interest under the Advances to Settlers Act.” Mr H. G. Parish seconded the motion.

Mr Bates said that the subject dealt with the prosperity of the Dominion, and chiefly of individual farmers and tiaders. Could a nation become bankrupt? The National Debt was £ 206.000,000, and private debts .£209,000.000. Unregistered mortgages he put down roughly as £100,000,000. That made £515,000.000. The estimated private wealth wan £502,000.000. What, was the credit balance ? There would be £40.000.000 of public property, making the assets £542,000.000. The balance was £27.000,000. During the last two years the rate of interest had increased one per cent, but he contended that there was no excuse for banking institutions increasing the rate. Agricultural banks, and the method suggested by the Dominion Farmers’ Union, was co-operative borrowing, enabling one to secure money at a low rate of interest. They bad had a “ snarl ” directed against them for suggesting co-operative banking, and in the “Lyttelton Times” the other morning there was an article assuming that malpractice was going ‘to happen. The writer looked at it from a theoretical point of view. The banks were not functioning as they should. Really, the;/ should be “ economic butchers.” but he contended that they were killing the lean instead of the fat. Then the banks -were not affording the best medium of exchange, because the rate of interest was too high. A crisis w as likely to arise if the political men did not stand out and take this matter up in the right way. The crushing burden on farmers at present would have to be dealt with in a much better manner. It was suggested that they should be put under the moratorium, but Mr Massey said that, this could not be done. There had resulted the bankruptcy of manv farmers, who could not get the money to employ labour. Referring to Treasury bonds, he said that thev were legalised economic burglary. The fnrmers asked only the right to live. “It is astonishing to me the grit that is in the farming community. They hare the doggedness of the British race and are. looking forward to patters improving.” he said.

At least 90 per cent of the population was affected adversely by the present operation of banking institutions. Only one section in the Dominion was piling up mdnoy these days, and that was the banking section. Mr NY. A. Banks said that the debts were increasing year bv year, and the end must come soon. The Government should be asked to come to the assistance of producers. People were borrowing all the time and not paying back. Mr W. W. Mulholland. president of the union, hoped that the executive would hesitate before passing the mo tion. Those farmers who were in the position to-day of needing assistance he held, were beyond the hope of such assistance. Mr Banks: There i» only a small per eentage like that. Mr Mulholland said that the Government could not lend money and reimburse itself under 6 per cent. Mi Bates’s figures, which had been taken from the Year Book, did not argue, tin w isdom of borrowing. The banks had not the absolute power that Mr Bates indicated. When money was available at lower rates than the banks were quoting it could be borrowed outside ! the banks. There was a big proportion of the money in the country that the , banks did not own. j Mr Bates: In banks T include all moneylenders. We want to make a : living and they want to make “ fat ” ! Mr Mulholland agreed that the present money rates were very heavy, but he was not sure that the passing ot the motion would in any way improve matters. The Government would not lend money to anyone in doubtful circumstances. He agreed that many farmers were at present putting up the g&mesfc struggle of their existence, and ho knew one typical example of a Dr mer and hi a wife agreeing to live for i a year on £BO. The trouble was how the Government could assist them by 'an advance. The community must be guaranteed against loss, but where was the security? After a little further discussion it j ws*-» decided to cut out the whole of the 1 motion except the last paragraph. | This was then carried.