Mr Poison's Attack.

Star (Christchurch), Volume LXVI, Issue 20541, 16 February 1935, Page 10

Mr Poison's Attack.

Vested Interests

Criticises Effect of Bill on Farmers. “ Star ” Parliamentary Reporter. WELLINGTON, This Day. principally the provision for the inclusion of shareholder capital, and the failure of the Government to evolve a co-operative plan which would have ensured cheap finance to the farmers, Mr Poison (Stratford), indicated in the House yesterday that he would vote against many clauses of the Mortgage Corporation of New Zealand Bill in the committee stages. Mr Poison said that had the question of interest reduction and principal readjustment been tackled some, at least, of the present proposals might have been avoided. Parliament might have extended the powers of mortgagors relief commissions, it might have cut interest, and it might have given in deserving cases readjustment of principal. Relief commissions should be given power when they, considered it necessary, and where there was involved principal that never paid and was not represented in value, to lower the amount so that the farmer would see over the top. Too Long in Chains. The farming community had been too long in chains, tied to big vested interests, not to desire some form of relief that would afford hope for the future. The farmer was asking why the Government would not start a plan to rid him for ever of the complete domination which he was under by the big vested interests. He was asking why he should work long hours year in year out for a pittance that was in some cases not better than that given the relief worker. During the past decade the farmer had seen the effect of the power of moneyed corporations, and he believed the system needed drastic improvement. The farmer was not a Socialist. He believed in individual effort and that the competitive system gave him the best oportunities, but he believed the system needed amending and improving, and that rewards should be more justly apportioned. The farmer was a cooperator, and he believed in a co-operative plan of finance, but realising that co-opera-tion had received in the Bill a body blow that was almost a death knock the farmer declared, as an alternative, that he was prepared to support State Control. A State aid plan and co-operative plan when used along with the farmers’ organisation could accomplish much in New Zealand. Two Conditions. The Bill meant the end of the limited co-operative rural finance which had been established in New Zealand, and which was a system that was the hope of the primary industry elsewhere. The organisations comprising the Farmers’ Union had approved the Government’s proposals only subject to certain conditions, first that bonds should be sold at such a rate of interest as would effectively ensure reduction of interest rates to the farmer, and secondly that the control should be co-operative or State Control. If profit were the motive inspiring people to enter the Mortgage Corporation, then the incentive was to keep the bond rate high and not to reduce the rate of interest. The cry of “no political interference ” offered excuses to investors to ask for higher rates. “We have fallen in Jhrough that dodge on more than one occasion, and I do not wish to see it happen again,” said Mr Poison. The Guarantee Fund. Mr Poison contended 'that the mutual guarantee fund of £2,500,000 whflch it was pioposed to build up would be the property of the shareholders and used by them to protect their own capital, and standing between them and loss. It was five times the amount built up of share capital subscribed by the shareholders, but the borrowers who supplied the mutual guarantee fund were not to have the slightest control in an organisation in which they were vitally interested. He could not understand how £500,000 share capital would inspire any confidence. A guarantee from the State would be much more satisfactory. What State Should Do. Instead of issuing share capital, the State should guarantee on top of the mutual guarantee the next 3 per cent, bringing it up to 5 per cent. That would launch the proposal much more satisfactorily than by the issue of share capital. It would mean cheaper money, it would save the 1 per cent that was to be paid to share capital and remove the scandal that less than 2 per cent of the capital raised was controlling such an organisation. It would enfranchise the real owners of the reserve capital, who took the whole risk of losses, and it would prevent powerful interests from obtaining control. The people from whom the share holder directors of the Mortgage Corporation .would be recruited had one object. It was not merely profits they were after. Profits would be a mere bagatelle to the power the control gave them. “If it will be added protection to the farming community to prevent shareholder capital from being introduced and thereby prevent shareholder control then I shall fight against shareholder control as long as I am in this House,” declared Mr Poison. It was a serious matter for the State to hand over to an independent corporation the enormous block of Government departments’ securities which it was proposed to transfer. It was extraordinary that the State should give to any private or share capital controlled concern the right to traffic in its securities in the way proposed. Mr Coates: Are you opposing the Bill? In His Own Way. “ I will express my views in my own way,” replied Mr Poison. “If the Minister thinks that in making a statement like that he is going to make a threat to me, he is making the mistake of his life. I am expressing my opinion as a trustee for the farming community. I am entitled to express the official view of farmers, a -vfiew with which I entirely agree. I make the statement without suggestion of a threat from anybody. I resent any suggestion of that kind.” Mr Coates: That is not an answer. Mr Poison: That is my answer to the Minister. Mr Coates: You are making a series of criticisms. Mr Poison: I intend them as criticisms. Mr Coates: I fail to see how you cannot even now support the principle of the Bill. Mr Poison said he was asking that argiculture be given a chance and the farmer be allowed to get some reward from a plan that would give him the lowest possible rate of interest with the utmost freedom. He was asking that the farmer be not shackled to any system of control or interest that might mean that rates would rise instead of fall. “ I am going to oppose many clauses in the Bill,” Mr Poison added, “ but I am not going to deny the measure its second reading. However, in committee, I intend to vote as I think necessary and right for such amendments as I think desirable.”