THE WAIPA POST. Printed on Tuesdays, Thursdays, and Saturdays. SATURDAY, 19th MAY, 1934. FARM MORTGAGES.

Waipa Post, Volume 48, Issue 3468, 19 May 1934, Page 6

THE WAIPA POST. Printed on Tuesdays, Thursdays, and Saturdays. SATURDAY, 19th MAY, 1934. FARM MORTGAGES.

A DEPUTATION of 400 dairy farm*ers has received a definite undertaking from the Prime Minister that the Dairy Commission will consider the question of farm mortgages. It was aptly pointed out that many farmers are reaching the end of their resources, and that in any proposals for the rehabilitation of the dairy industry mortgage debt could not escape its place in the consideration. The importance of the question was fully realised by Mr Forbes when he gave an assurance that opportunity would be accorded farmers of plac- : ing evidence before the Commission to enable some general recommendation to be made to the Government. But, he added, and it seems an inevitable rule that wlill have to be followed, “each case would have to be treated on its merits.” Without a doubt the debt charges, both public and private, affecting farms and every other form of security, rank as an outstanding difficulty of the present day. The levelling process has been proceeding steadily in recent years, and it would appear that any more sweeping adjustment by legislation or regulation than has already been attempted would create widespread confusion. Whatever claim the borrower may possess, however hard his troubles may be, no Government can ignore the rights of the lender. It can be said, and in a large measure it is true, that one of the greatest disturbing factors in the world to-day is the destruction of confidence, and it is abundantly clear that political movements that serve to further uproot confidence are to be avoided unless in extreme instances of urgency. Moreover, when it grants relief to the borrower the Government will, unless particular care is exercised, inflict hardship on the lender. The terms of money contracts arq about the most sensitive mechanism in the economic structure of this or any country, and the adjustments which emergency prescribes are better suited to an economic law than to a political law.

That there is need for a systematic review of farm finance is, jjowever, undoubted. As yesterday’s deputation told the Prime Minister, many farmers who may have to abandon their farms are highly efficient and they therefore should have every consideration in an effort to retain them. The key to the situation is Mr Forbes’ ready recognition that each case must be treated on its merits. In this it becomes necessary to review the condition of the years 1922-30, when a false sense of security led this country into a wild orgy of. speculation. In those days much paper value was created. If inquiry to-day can separate those “ paper money ” mortgages there should be some prospect of an effective solution. After all those “ paper money ” mortgages never, at any time, represented a real or actual value. They were simply the product of a false appraisement of value, and they remain to-day a sorry reminder of an age when speculation ran amok. The attempt under present-day conditions to pay interest year by year on a value which has never existed is doomed to failure. Therefore, although apprehensive of any steps contemplated which would undermine and uproot confidence in real investment, most people will approve of any systematic action designed to destroy the evil consequences which followed in the wake of inflation. Moreover, as a security for the future, most people would applaud the Government if it could devise in our, (land tenure policies some safeguards against mad-headed speculation being capitalised in land values —both rural and urban--now and in the days to come. The sooner we can rid ourselves of the fictitious values that were created in the years of boomvalues which were written-up in the of mortgage debt on which interest has to be paid—the sooner will we emerge from our troubles. too, will confidence in real and actual, investment be more speedily restored.