109

8.—5.

D. BATES.

23,750,153 sheep; 2,020,17! cattle: 1922—22,222,259 sheep; 3,323,223 cattle. And the landowners are much the poorer- (heir mortgages have; increased. The total amount outstanding on mortgage in 1913 was £97,816,375 ; in 1922 was £231,140,101; and in 1923 was £242,591,933. Interest on nearly two millions is at 8 pier cent., on over three millions is at 7 per cent. The: rate varies up to 20 per cent. Bankruptcies.— l9lß, 164; 1919,111; 1920,144; 1921,336; 1922,690. This takes no note of private liquidations, which in the: case: of farmers are considerable. Occupations of Bankrupts in 1922. —Professional, 12; domestic, 25; commercial, 153; transport,, 45 ; industrial, 188 ; agriculture, 218 ; other primary pursuits, 5 ; dependents, 7 ; indefinite, 37 : total, 690. Some Increases in the Cost of Production. —(l.) Prices of all articles used by farmers increased* For instance: Double-furrow plough—l9l3; £21 10s. ; 1917, £34 155.; 1919, £40; 1920, £16; 1923, £35. R.P. timber 1913, 225. 6d. ; 1920,465.; 1923, 435. 3d. (2.) Railway freights since 1913 have gone; up 10 per cent. The 1913 tariff is used by the Railway Department with a calculated 40-por-cont. increase:. (3.) Wages have increased quite 50 per cent. (4.) Rates of interest have increased. Bank overdraft rate; in 1913 was 5-| per cent. ; now it is 7 per cent, and upwards, and overdrafts are difficult to secure at that. Interest on mortgages has increased from 5 per cent, tei 6i per cent., 8 per cent., 10 per cent., and even more. ■ (5.) Farmers have difficulty in securing loans em their land, there being such competitive demands for accumulated funds as — (a.) Loans raised by local bodies : (b) loans on debentures tei trading Concerns (tax-free) ; (c) leans to Government; (il) share: investments arc taking the place: eif land as gilt-edgeel securities. (6.) Increase: of stamp duty paiel em transfers—ss. per £100 —and the stamp eluty of ss. per £100 em all mortgages. The amount of mortgages registered and duty paiel —in 1920, over £55,000,000— duty paid, 0ver£137,500 ; in 1921, eiver £40,000,000—duty paid, over £100,000; in 1922. over £34,000,000—duty paiel, over £85,000. The increased stamp duty paid in the case eif transfers would be equivalent to or over the: eluty paiel on mortgages. (7.) By the process of eleftation of currency the relative indebtedness of mortgagors is automatically increased. Suggestions for improving Conditions of Farmers respecting Taxation ' and to encourage Production.- (\.) Reimpose the income-tax instead of the land-tax. (2.) As an alternative, suspend the operation of the graduated land-tax until there is no more deflation. (An owner cannot sell readily, and if at all, then at a loss, and often at less than land-tax values.) (3.) If the: land-tax is retained, amend the law to enable an owner of land to deduct the full amount of his registered mortgages irrespective of the amount of land held, (4.) Abolish the stamp eluty payable on mortgages or agreements to mortgage, and reduce the stamp duty on transfers back to the former rate. (5.) No suggestion for adjustment of taxation can. be of any lasting benefit unless the economic understructure is fully rece)gnized and a due appreciation given to the effects of inflation and deflation of currency. Suggested New Sources of Taxation. — (1. All services and industries competing with private enterprise, whether carried em by the State or by local authorities, should pay their share of taxation into the consolidated revenue as well as local taxation. (2.) By the incidence erf eleflation all debts are automatically increased, anel I suggest the appointment erf expert witnesses to examine the matter of deflation of currency. I believe there are avenues of taxatiem suggested by economists that can be explored, and methods of taxation that can be adopted, which not emly will avoiei the ill effects of deflation, but will turn tho process of deflation to a national service, reduce our national debt, anel cast the burden of taxation upon those: best able to bear it. Mr. Weston.] Mr. Bates, under " Suggested New Sources of Taxation " you say, " I believe there: are; avenues of taxation suggested by economists that can be explored, and methods of taxation that can be adopted, which not only will avoid the ill effects of deflation, but will turn the process of eleflation tei a national service, reduce: our national debt, and cast the burden of taxation upon those best able tei bear it." Can you mention one of those avenue's ? I elo not pose as an economist. But can you mention even one such avenue: of taxation ? Professor Condlifle has stated that a large portion of the revenue' of the banks conies from exchange. As far as I have been able to study, the exchange in pre-war time was used for the transfer eif credits, but now credits cannot be transferred by the importation eif gold. It conies to this : when we have the' balance of traele; say we have £50,000,000 worth sent away anel £40,000,000 sent out here, then we have a credit balance in London, and the difficulty is to get that out. Therefore they charge a very considerable amount so as to reduce that credit which woulel come to clients in New Zealand—that is, the primary producers—and that operates detrimentally to the, farmers and primary produoers. At the: same time they give: a premium tei anybody wanting to send Home money. That is an anomaly. I noticed just recently that there: have been double, the number of motor-cars imported during the last three months as compared with the number imported during the oorresponeling period of last year. Weil, that balance of trade is inducing that extravagance. We can make, no advantage of it —■ neither the country nor the farmers can get any advantage for the wealth wo e:xport Home, It becomes a, credit at the other end, anel we are induced to spend it extravagantly. My suggestion is that when exchanges exceed the orelinary amount of payment for services, then the country should receive: the' benefit. How do you suggest that, shoulel be' done ? —That is not for me to suggest, As a rule', they emly get | per cent, when gold can be exported anel imported. I haVe paiel as much as £2 per £100 in arranging credits. An organization to whieii 1 belong has paid as much as £8 per centum in exchanging money between here anel India, You must be mistaken, surely. Ido not think it e-ve-r got up to that, even at the very worst period. 1 think you are exaggerating ? —No, I can substantiate that, That was due, to the price of silver ?—Partly due to the increased price' of silver ; but that would not account for that enormous charge. Further than this, the services for exchange at the present