FARM MORTGAGES

Ashburton Guardian, Volume 55, Issue 111, 20 February 1935, Page 7

FARM MORTGAGES

THE CORPORATION BILL. DEBATE ON SECOND READING. (Per Press Association). WELLINGTON, February. 19. In the House of Representatives 'today the second reading debate on the Mortgage Corporation Bill was resumed by Mr C. A. Wilkinson (Ind., Eden), who said he did not know of any Bill that would bring about a greater feeling of despair and disappointment than the present Bill. It would not assist the farmer who was up against it, and he could see nothing in the Bill that would assist the base industries of the Dominion. He wondered why it was necessary for the Minister to consult the money-lending interests of the country and not the people most .vitally concerned the

farmers. The Bill merely set up a i money-lending institution and did nothing to rehabilitate the farming industry. The position in his district so far as farmers were concerned was i practically hopeless. They had borrowed money and could not now pay the charges concerned. He appealed to the Government to go a long way further than it had done. It should get right down to bedrock and settle the position. A.voice: How wOuld you do it?

Land Values Too High. Mr Wilkinson: We should abolish all farm mortgages completely." Land values were too high and the land would never stand the charges placed ' up6n it. If the land was to be revalued when a new loan, was applied for, the farmer would never be able to secure enough to pay off the existing mortgage. The Bill would not rehabilitate the farmer. What was wanted was a low rate of interest. He believed that the Goyernment' could secure money at 3 per cent. It should borrow at that figure and lend the money to farmers. If there were to be losses they should be borne by the taxpayer. In America the farmed- was lent money at per cent. He thought T the Corporation would'keep loans down and keep interest rates up. Mr F. Langstone (Lab., Waimarino) said no" Government could stand by and see tens of thousands of farmers going to ruin. He contended that the Government could borrow and lend ' money at a cheaper rate than the Corporation could hope to "do. Interest was not the farmers' problem at present : M was; income. Prices "had fallen because bankers' in.common with the Government had followed a policy of deflation. The reason the Bill was brought forward was not to help the farmer, but to.save the face of the Government. When Labour came into power, as it looked like doing at the •next election, it would solye the mortgage problem and it would'not need the Corporation. ' . .' , Budgetary Control. Mr H. M. Ruskworth (Ind, Bay of Islands) said everyone would endorse the Minister's statements of good intentions and sympathy, but that would not improve,the position. It had been - suggested that the money to be issued would carry 3 per-cent, interest, but that required explanation, as. rural credit bonds* which would be in competition with Corporation bonds, returned 4 per cent, to the investor.. He thought the Corporation rate could not. be less than 4 per cent., arid taking all the charges into consideration, the probable rate to borrowers would be about 6i to 6* per cent. The proposal meant putting the farmer under budgetary control, which meant robbing him permanently of his initiative, self-reliance and self-respect, and would reduce lnm to a state of peonage. '•• s ■ Mr H. C. Dickie (C, Pateaj said that what seemed to be worrying members most was the Bill that was coming afterwards, and that was arousing interest throughout the country. He contended that farmers had been consulted when legislation" was framed. Budgetary control involved concessions by everybody, and would enable the farmer to get back on the rails. He thought the farmer could have been assisted by giving him another cut in his interest rate and bringing the relief commissions up to date. He considered that the number of shareholders' directors should be reduced by one, and that the tenure of their office should also be reduced. He also thought that the dividend should be . limited to, 41 per cent. . Mr D. G. Sullivan (Lab., Avon) said that even, the supporters of the UiU were very half-hearted and that must be disappointing to the Minister in charge of the Bill and his colleagues.

Allegation of Unfairness. Mr R. A. Wright (Ind., Wellington Suburbs) said- that all Government measures so far assisted all farmers ■whether they needed assistance or not, and that was not fair. For unemployed relief or old age pensions a means test was applied, but farmers benefitted whether they were in extremis, or not. He'contended that two joint managing directors was not a good thing, and urged that there should be one managing director and one assistant as in the Reserve Bank. * Mr J. O'Brien (Lab., Westland) said he was convinced that the Bill was merely another gesture to the farmers that in future there would be cheap money for them, but the same advice had been given them "for the last 13 orl4 years. The farmer would be at the mercy of the Corporation and would have no chance if he failed to 'make good. If the Government wanted to do something to assist the farmer, it should do something to assist him to get rid of some of his liabilities, and if there was to be a writing down of his liabilities, mortgagees and mortgagors should share equally in it and the 'farmer could then make good; Mr A. E. Jull (C., Wairarapa) said he approved of the. Bill. The farmers were entitled to assistance, for they were the people «upon whom the country relied for its prosperity. The Government was not creating a lending monopoly, and there was nothing to prevent any person from lending money in a similar way. Mr Jull said he thought it better to

do away with private shareholders. A big measure of that nature would not be perfect at first, and when changes had to be made those private shareholders would be found to be irksome. He could not believe that the Minister was serious when he said he thought the presence of private shareholders would give investors greater confidence. He thought there was possibly another motive and that they were there because they were afraid of another institution being set up which might tread on their corns. He did not think that the calling up of £500,000 capital would influence the. investor one iota. The easiest way to give bondholders confidence was to give them representation on the Board. They were the people who would find the money and they should be represented on tho Board. He also saw no need for the presence of a Treasury official on the Board.

Mr W. A. Bodkin (C., Central Otago) said there was need for an institution such as was proposed in the Bill, and he congratulated the Minister of Finance on bringing the measure down. The man who was in difficulties could not get any assistance from existing financial institutions, and the Minister recognised that. The debate was adjourned and' the House x rose at 10.30 p.m.

FARMERS EXPRESS DISMAY. OPINION IN TARANAKI. , HAWEDRA, February 19. "That this meeting of West Coast farmers expresses a deep sense of disappointment and dismay at the form in which the Mortgage Corporation Bill has been presented to Parliament," was the text of a resolution passed at a meeting of 500 farmers held at Hawera this morning, following addresses by Mr W. J. Poison M.P., H. E. Mellsop (Auckland), H. Blyde (Lepperton) and Lloyd Hamond (Hunteryille). - The meeting also expressed entire opposition to the principle of joint stock control contained in the Bill and urged Parliament, even at this late hour, to amend the measure to provide for co-operative or, in the alternative, State control. The meeting was satisfied chat no organisation run for profit either could or would raise money as cheaply, or lend it to farmers or anyone else at as low a rate as" the State could. Mr Poison attacked the Bill on lires closely following his speech in farliament, intimating that he would light the clauses in the Bill through the Committee stage^