RURAL MORTGAGES

Ashburton Guardian, Volume 55, Issue 130, 14 March 1935, Page 6

RURAL MORTGAGES

THE FARMERS' VIEWPOINT. NECESSITY FOR ADJUSTMENT. SECURITY OF TENURE DESIRED. "A very useful measure" is how the Rural Mortgages Final Adjustment Bill, introduced in the House of Representatives on Tuesday, is described by Mr Raymond Oakley (president of the Mid-Canterbury Provincial Executive of the New Zealand Farmers' Union). Yesterday Ashburton business men expressed their opinions of the Bill; to-day the farmer's view was given to the "Guardian." "This Bill has been designed for the purpose of adjusting the mortgages of farmers who, during the past few years, have been protected by the Mortgagors and Tenants Relief Act, and to provide them with some security of tenure," said Mr Oakley, to a "Guardian" reporter this morning. "Many farm properties are to-day carrying mortgages considerably in excess of their present productive value, and adjustment is necessary, both from the point of .view of the mortgagor and the mortgagee. Under this Bill both are equally protected. The Mortgagee's Rights. "The mortgagee will be entitled to interest on the productive value —the only sound valuation—of the security on "which he advanced his money. The mortgage will not be actually written down until'a probation period of five years has elapsed, and if, in the meantime, the productive value of the property has increased, the mortgagee will be entitled to 50 per cent, of such increase, providing that increase does not raise the mortgage above the amount originally advanced on the security. "The point must not be missed," declared Mr Oakley, "that a rise in the value of our primary products during the period of probation would, in many cases, .restore the value of the property to, or even above, the amount of the mortgage. Freetfom from Eviction. "The mortgagor would, under this Bill, have security of tenure, provided he was reasonably efficient and industrious, and so be freed from the nightmare of eviction on the expiry of the Mortgagors Relief Act. He Mould have an incentive to do his best and to hope that, in the future, he would be able to call his home his own."

The clause providing for a 20 per cent equity being allotted to the mortgagor had been severely criticised, continued Mr Oakley, but that figure was the maximum allowance, the actual percentage being fixed by a court of review, after consideration of the amount originally paid off the value of the property, and many other aspects affecting the position. Bearing the Losses. "Surely it is but fair, after spending the best years of his life, and the whole, of his savings, that the farmer should have some equity in his holding. Farmers are in no way responsible lor the disastrous fall in the value of primary products, and cannot reasonably be expected to shoulder the whole of the loss," the speaker concluded. A Beneficial Action. Mr A. P. Bruce (president of the Ashburton Agricultural and Pastoral Association) took the view that the Government was making an honest attempt to bring farmers' costs nearer the point at which they could compete with the rest of the community. "Any action which the Government takes toward reducing costs to the producer, who for years has been using up capital in order to exist, will be beneficial," he added.