FARMERS’ FINANCE.

Waikato Times, Volume 97, Issue 15270, 21 June 1923, Page 6

FARMERS’ FINANCE.

(To the Editor.) Sir, —The report of the chairman of the Bank of New Zealand is such as to call for comment in its reference to farmers’ finance. Sir George Elliot is fortunate enough to be head of a financial concern that received benefits from a-source which dealt a disastrous blow to large business concerns, especially, farmers’ co-operative, trading companies. Iu 1920 imports were over double, those, of 1919, .and it was in 1920 that the slump made itself felt. Now,. Sir George .must..know that.'many proprietary, concerns controlled by men of the keenest, business, acumen .were placed in straitened circumstances by. the fulfilment of repeat orders, accompanied by. the slump. He - also;- ought to know that, farmers’, businesses, whilst controlled by men like himself, .who. are not.experts in the. details of the respective enterr prises, are .managed , by. -.well-trained and competent business managers; and, further, he must .know that once upon a time the State, had to vote £2,000,000 to save his institution from closing- doors. .The. address is one of a boastful man who fails to be able to discern between success.due .to. fortunate circumstances-. and ■ business ability. The aim of the-farmers’ companies has been to be of service to the industry and not to. pay big dividends to their, shareholders. Sir George Elllot’9 remarks .anent agricultural banks are quite natural, coming from the -head ■of ■ an. institution that must view • with -some- trepidation . their establishment. What the Government has to consider is; is It going.to assist agriculture . here, as experience shows It has dond brother countries, and if so, it must recognise/it is of the first Importance to enact the' 'necessary legislation, which must be, of a kind that will foster a,system of banking that will help, to promote and sustain agriculture. The agriculturist is entitled to exceptional treatment In ..the way of credit. Sir. George says, provided . agricultural 'b'anJtS' rely., on their own resources as oilier banks-do, and that they are'subject'to taxation; he sees no objection to their establishment/ He further says, “nevertheless the fact that the activities of the Advances to Settlers’ Department have been recently extended renders quite unnecessary the establishment of a bank.’ As to the bank relying on its own resources, once established I have no doubt; but why Sir George Elliot insists on it being subject to taxation since he has no objection to the Advances to Settlers’ Department financing the farmers, I fail to discern. The fact 'that agriculture provides the source of nearly the whole revenue of the Dominion entitles it, as I have said above, to exceptional treatment, and whatever helps to promote the same must be recognised as a national benefit. The exemption from taxation has its compensation in increased revenue from increased freights and' returns .from all services. With regard to the Advances to Settlers’ Department, its operations are totally inadequate, as shown by the fact that there are 243 million pounds of registered mortgages,. of which 160 millions are on farms, whereas only slightly over seven millions of advances by the above department were outstanding at 31st March, 1922. The Prime Minister says that nearly li millions were advanced to settlers last year, which is a totally inadequate sum to meet the requirements. In referring to land values, It is generally held that the farmers had themselves to blame for the; inflated values of land, but what really happened: a small percentage of farms changed hands many times and made it appear that the thing .was more general than In reality. The Government vyas the. worst offender in bringing about inflated values. One of the effects of an agricultural bank is to stabilise values. It not only provides money for the borrower, but an investment for the lender, and thus secures .a natural flow- of money ,to agriculture. Sir- George Elliot, when he ventures to give advice relative to the management of dairy, herds, is on dangerous ground, as whatever he knows about finance bis knowledge of dairy farming is manifestly limited.— I am,' etc., R. D. DUXFIELD.