MORTGAGORS' RELIEF.

Auckland Star, Volume LXII, Issue 243, 15 October 1931, Page 7

MORTGAGORS' RELIEF.

LEGISLATION OPPOSED. DESTROYING CONFIDENCE. CHAMBER OF COMMERCE VIEW. Strong opposition to the Mortgagors' Relief Amendment Bill Vas contained in a report by Mr. C. F. Bennett which came before the Auckland Chamber of Commerce at its meeting this morning. The report, which urged the Government favourably .to consider the establishment of advisory boards throughout the Dominion in lieu of enacting the proposed amendments to the Act, was adopted. -

"WTiile the Government may have information justifying the existence of the • present Mortgagors' Relief Act," said Mr. Bennett, "it cannot be too strongly urged that the suggested amendments empowering the Courts to suspend payment, modify the amount of principal and extend the terms of existing private contracts as between mortgagee and mortgagor, or vendor and purchaser of rural lands, are fraught with very great danger to the community. It must be obvious to all possessed of knowledge and information regarding finance in the country that any attempt by legislation to interfere in contracts by enforcing reduction in interest or principal can only result in utterly destroying the confidcnce hitherto existing in the honourable carrying, out of such contracts and in rendering it extremely difficult, if not impossible, for funds to ; be. available for such investments in future. "V-" •'

Advisory Boards Suggested, "Realising that land is the very basis of all values, the Auckland Chamber of Commerce is of the opinion that the time is opportune for the Government to establish advisory boards before whom mortgagors and mortgagees could fairly place their respective positions. Especially is. this desirable in rural centres." i

Such boards,' the report suggests, might be.composed of three of the most experienced and dependable residents in the district, possessed of local knowledge and cognisant of values, two experienced Government officers — one from the Valuation Department and one from the •State Advances Department—and the president might be the magistrate of the district. The procedure of such boards would be conducted on the lines of a conference to devise ways and means of meeting the position and not as a court burdened ■ with formalities. Instances were known where private mortgagees would willingly rebate portion of the principal sum if their overdue money were now repaid. The threefold effect of this would be—(a) deflating the original land cost; _ (b) encouraging the settler to continue with less amount of mortgage (c) liberating private money for other pursuits.

The report further states: "Under present arrangements settlers applying for State Advances, are dependent <m the reports of Government valuers alone. Any application declined without stating reasons tends to discourage the settler, thinking he has no asset in his land, and further places him solely in the hands of the Department's valuer. It occurs to this clumber thai in cases such as these the setting up of advisory boards might prove of great help to the Government in regard to the granting of loans as well as in connection with existing loans.. The' extreme difficulty experienced by rural settlers in obtaining, any advances from the State Advances Department on lands of admittedly some value calls for immediate attention of the Government, particularly -as this is in such marked contrast with the recent extraordinary over-advancing by the Department in its loans to workers for home buildings. Cases reviewed by ,the advisory boards would also serve as. a check 011 the estimates of; the Government Valuation Department—a matter considered by this chamber to be long overdue.'"' » V

Mr. Bennett said that if the legislative proposals went on the Statute Book they would be one of the most serious inroads into the confidence of the . community that could be imagined. He, characterised ,the suspension of payments, the modification of the amount of principal and the extension •of the terms of existing private contracts as most un-British. Mr. A. Gr. Lunn also criticised Government interference in private agreements. The report was adopted unanimously, and it was decided to send a copy to the Associated Chambers of Commerce and to the Minister of Finance.