THE MORATORIUM.

Auckland Star, Volume LII, Issue 71, 29 March 1921, Page 9

THE MORATORIUM.

■ TV. ilie Kdltor.i Sir, —The Prime Minister in a recent somewhat indiscreet speech, preened himself for having relieved a section of the community from immediate subscription to tiie soldiers' loan on the plea of the imminence of tlie income tax payments, quite regardk'dri of tlie circumstance that the honest subscriber; had also to pay the same tax. in.it statement «ac in all conscience sufficient iy d< moralising in its effect to a community whose moral sense has already b?co:je dulled by a system ol legislation which has extended mortgages and ibroktn contracts to an extent whi.-h a Troteky might envy. Hut this is as <lust in the balance compar"d with thin last legislative infamy tliat has been perpetrated. A number 'if over-burdened trading companies have been able to borrow from tne public large sums of money repayable at call. The Government has parsed a measure. which in effect has the following resuite: (1) The director? and shareholders of thoee concerns —admittedly in need of more money than the banks will advance them —are given the use without either security or thr eliplitest control of their creditor:-, money for an indefinite period: (2) the Government, by passing this legislation, lias created a condition which will necessitate the renewal of its moratorium; consequently many years may elapse licfore the unfortunate depositors, many of whom are poor people, win see their money again. No judge of the Supreme Court is likely to alter the action ot Parliament; (3) I have always understood it to be an axiom of fair dealing as between the State and the subject that where private property is confiscated for the public weal fair compensation should he paid to the subject deprived of hie property. In this case the unfortunate individual whose property has -been appropriated by these Bpecially-favoured companies is entitled to receive—whether he will ever get it or not is another matter—an extra 1 per cent per annum of interest. To an unfortunate depositor who has contracted to pay for a houee or goods or is under liability to his bank or other creditors, and is consequently faced with ruin, thie is surely adding insult to his injury. (4) One of the greater iniquities involved in the measure is that the bankers and trade creditors of these <ompanien are not prevented from making themselves safe at the expense of the depositors. No restriction is imposed on their getting their overdraft or debts paid with the depositors' funds. We have been told that had this not been done a grave crisis would have arisen. It is quite conceivable that a number of concern* which have been notoriously overtrading would have collapsed. " It woulJ have been a thousand times better had they done co. A process of gradual liquidation of the weaker companies would in course of time have given their creditore and possibly shareholders most of their money. We* should at any rate have caved our eelf respect. A very narrow line divides private repudiation under the sanction of Parliament and! State repudiation. The shook to our national credit will be undoubtedly severe, and the time may unhappily come when the people of this and other countries will view with timidity and doubt the obligations of a State" whoee administrators and Parliament will with so little consideration pass a measure which cuts at the root of all business honesty.—l am, etC " ONE HOT AFFECTED.