MONEY FOR MORTGAGES.

Auckland Star, Volume LVI, Issue 246, 17 October 1925, Page 8

MONEY FOR MORTGAGES.

It may be counted as a mortal sin in some quarters to say a good word for the mortgagee, but the Government candidate for Auckland West made one or two points in a speech this week that may profitably be considered. Discussing the Labour party's land policy and its prejudice against the mortgagee, Mr. Oldfield said that nearly everyone in the hall had money in the Post Office Savings Bank, the Auckland Savings Bank, a building society, or a friendly society, and was drawing interest on it, and to pay that interest these institutions had to invest their funds in "giltedged security —farm lands." This, of course, is not the whole case. Such institutions do not invest all their funds in mortgages, and it might be flattery to apply the term gilt-edged security to farm lands in general without qualification. Nevertheless, a very important truth is contained in Mr. Oldfield's statement. Mortgage money is provided by the savings or profits of people here or elsewhere, and a large proportion of it comes from savings of the mass of our population. The motion that a mortgagee is necessarily a wealthy man is quite wrong, and even if a wealthy institution Is the mortgagee it may obtain the money it lends from the savings of persons of moderate means. The number of savings bank accounts in New Zealand is- more than half the total of the population, and besides these there are the trading banks, the life insurance companies, the building societies, and other institutions that receive savings. We pointed out recently in discussing the controversy on confiscation versus compensation in the Labour party at Home, that Labour, in its march towards socialism, must reckon with this distribution of wealth. So must Labour in New Zealand. It is trying to convert to socialism a community in which a very large proportion of the people own property. Is it unreasonable to suggest that realisation of this difficulty may be responsible for the whittling down of the party's land policy ? To revert to the question of mortgage money, it is quite true that mortgaging has been overdone, but if the country is to progress there must always be a supply of money for this purpose. Unless the Government is foolish enough to inflate the currency or credit, this money can be supplied only from the surplus funds in the country. Talk of State action may obscure the issue. The Government "can lend only as much money as it can raise.