A New Policy.

To the Editor.

Sir,—At Mr Wason's recent meeting at Chertsey, on the 16th of May, the following motion was proposed by Mr Newlyn:—"That, in the opinion of this meeting, the Government should take the earliest possible opportunity of reducing the annual interest on mortgaged property by carrying a Bill to enable them to raise loans at suitable periods for the purpose of advancing the money so raised in England to persons holding land upon which a mortgage exists. All mortgaged property should be liable, under conditions similar to those now prevailing, but any gain made by the Government through having to pay less interest than the land owners now pay, should be shared by the farmers, i.e., supposing the Government to gradually succeed in raising money to lift the mortgages at 4½ per cent, a farmer who now pays 7 per cent would pay the Government half the difference between 7 and 4½ per cent over the cost to the Government, that is to say 5¾ per cent, the remaining 1¼ per cent going to the country, in an actual saving on the amount now annually paid as interest on mortgage. That the above resolution requires to be given effect to before any steps can be taken in the direction of obtaining the' unearned increment,' or of nationalising the land of the Colony."

Mr Lambie, a member of the Ashburton County Council, seemed to consider the above proposal a very sarcastic one, and a severe hit at those statesmen who are leading the people away from the serious subject of taxation by such "fads" as the "unearned increment" and the nationalisation of the land. But, as the subject raised was one well worth serious thought, he hoped to see the suggestion made public. It certainly contains the most novel outlines of a policy, and excels, in originality and boldness, all the plans for keeping money in the Colony that have recently been suggested by our politicians, whether followers of the Government, or admirers of Sir George Grey or Mr Montgomery.

Supposing that the figures used in the above proposal are given simply to add point to the mover's idea, I can see nothing in it to startle any legislator. There can be no doubt that the high rate of interest which the average farmer has to pay at: present is a very heavy burden, more especially after seasons like the last, and it cannot be wondered at that the general cry is, "farming does not pay." It may reasonably be calculated that the rate of interest on rural mortgages averages rather above, than below, 7 per cent. As a dead weight on the land this is a very serious matter, and without going at present deeply into the question, it should, in my opinion, receive very careful consideration from politicians, irrespective of parties and business interests. As I read the proposal, the idea is simply that the Government should act as agents in raising loans from time to time, to take up mortgages as they become due, and that the State should collect from the mortgagors a fixed rate of interest, with which to pay the mortgagees the annual interest guaranteed by Government, keeping at the same time a portion of the interest paid by those receiving the advantages given by the State. If, for all mortgage-money raised in future, the outside capitalist only received 4 per cent instead of (say) 7 per cent, as at present, it seems clear that the whole country would gain the 3 per cent difference which is now annually remitted to England. As long as the Government only forwarded the guaranteed interest of 4 per cent to the mortgagees the gain would, on the above basis, be the same to New Zealand as a whole, if the Government received 1, 2, or 3 per cent for their assistance. Those who now "fume and sweat under a heavy burden" in the form of a mortgage would, I think, be glad to pay the Government 1 per cent if their so doing would leave them gainers by a clear 2 per cent. A profit of two-sevenths in these times is not to be despised, as it marks the difference to the farmer in particular, between prosperity and bankruptcy In his recent campaign Major Atkinson alluded, with justifiable pride, to the fact that the Government had, by their financial management in connection with the loans, effected a saving of £30,000 per annum. If the gallant major could, by adopting the above scheme, save the country or the farmers something like £600,000 per page 15 annum, his lease of political life would be considerably lengthened. No doubt town capitalists will view the proposal with little favour, and will plead that the State should not interfere with private financial affairs. The farmer and working man will, however, view the subject in a totally different way, and will be of opinion that the less money we send away, as interest for the loans we require, the better it will be for the whole country. As Sir Julius Vogel was the founder of the New Zealand Government Insurance Department, he will probably see something worthy of State support in the Mortgaged Estates Bill, and there seem to be no smaller elements of success in the latter proposed, than in the former accomplished, attempt to interfere with private trading. There can be little doubt that all concerned in the farming interest will wait impatiently to learn the views entertained by Sir Julius Vogel upon this large question, and that his attitude to the agriculturists on Friday evening next will either make or mar him as the Ashburton wooer.