AS OTHERS SEE US.

Waikato Times, Volume 111, Issue 18638, 17 May 1932, Page 8

AS OTHERS SEE US.

CONDITIONS IN NEW ZEALAND. SIR L. RAW’S’ VIEW’S. (By Telegraph.—Special to Times.) AUCKLAND, Tuesday. -Sir Lennon Raws, managing director in Australia and Ne\v Zealand of Imperial Chemical Industries, who is concluding a business tour of the Dominion, said: “The factor which strikes a visitor from Australia most forcibly is the confidence of New Zealand in the stability and integrity of the country and its institutions, which contrasts so strongly with that loss of ( confidence in Australia last year which resulted in a flight of capital, a heavy fall In security values, and a serious depreciation of the currency. Confidence is a great asset, which should be jealously guarded.” New Zealanders had every cause' to have confidence In their country, continued Sir Lennon, but, on the other hand, there were some people disposed to base their confidence on the idea that something was hound to turn up, instead of on the thought that something had to be done. The resoluteness, courage, and initiative which characterised New Zealanders were the best assurance of the ultimate return of prosperity. Valuable Object Lesson. Some of the farms in the' North Island impressed in regard to the results achieved through up-to-date methods of pasture management. These farms provided valuable object lessons of what could be done, and it was surprising that tyre general level of efficiency was not higher, In view of the striking results obtained. Tho assistance given to the farmer by the subsidy on superphosphate was a far better way of extending help than the bounties given in Australia. It was most important to everybody in New Zealand that the fertility of the soil f should be maintained; it was the best>*\ way of maintaining land values; It could not be emphasised too often that the high standard of living enjoyed by the primary producer in Australia and New Zealand could only be justified and maintained by a high standard of efficiency and productivity.

Importance of Mortgages. “ A visitor immediately notices tha importance of mortgages in New Zealand,” Sir Lennon said. “ They occupy a chapter in the official Year Book, whereas they are not mentioned in lha similar Australian publication. It ij significant that, according to the New Zealand Year Book, the value of land and Improvements from 1878 to 1992 increased by slightly over 50 per cent. In the 18 years up to 1920 the total valuations more than 'doubled, whila from 1920 to 1927, unimproved values increased by over £50,000,000, and capital values by £148,000,000, increases of 18 per cent, and 31 per cent, respectively. Mortgages registered in 1929 in respect of country or farming lands totalled £115,000,000, or 75 per cent, of their unimproved value. The mortgages over areas from 10 to 15 acres averaged £55 an acre and over areas from- 40 to 30 acres, £23 an acre. The significant.'® of these figures is shown in the statement that in 1930 interest on mortgages was a third of farm expenditure. It must be very much higher to-day.” One who believed that the most Important thing In Australia and New Zealand was to re-establish equilibrium between internal and external prices and between costs and prices found >. . the question of interest on farm mort- r gages a difficult stumbling-block toward such an adjustment, Sir Lennon continued. In Australia, speaking very generally, a large proportion of the interest on such mortgages, was not being paid in full. Mortgagees, especially banks and pastoral houses, were taking interest into suspense accounts against the time when conditions improved. However, it was apparently recognised that some reduction of land values was inevitable, and although this did not necessarily mean that the mortgagee should hear the loss, it was obvious that the mortgagor should regain some equity in his land. Such a reduction in values had been effected in Australia through the cut in the rate of interest. Australian experience in varying nominal wages according to a cost-of-living index figure suggested tha* some similar relationship between mortgage interest and farm prices might be advantageous. To-day on® was apt lo forget the hardships borne by the rentier class during the period of rising prices, hardships relatively every bit as great as those now being endured by the mortgagee. Restoring the Equilibrium. “ I have heard a good deal in New Zealand of schemes for opening up new areas hitherto regarded either as waste land or land of low productivity,” Sir Lennon said. ” 1 have heard of areas being settled by Government schemes at what seems lo me to be an extremely high cost per acre. In my opinion, at a time like this, more intense cultivation of lands already occupied is more important than capital expenditure on new areas. At the moment. people seem to look for relief mostly lo a return of high prices. That prices must rise considerably \ f above their present level is undoubt- y e-d; but relief can also come by a re-j / iluclion of costs. Prosperity will re-,’ turn when prices arc in equilibrium,’ so that goods and services can cx-i change freely. Reduction of costs is, every bit as important In restoring! equilibrium as a rise in. prices.”