MORTGAGE CORPORATION SCHEME.

Auckland Star, Volume LXVI, Issue 49, 27 February 1935, Page 6

MORTGAGE CORPORATION SCHEME.

In reference to the proposed Mortgage Corporation, the politicians are talking around the fringe of the subject and evading the core of the matter. The proposals of the Minister of Finance, taken ae a whole, will not bring any final benefit to the farmers, but will definitely have the effect of diminishing the incomes of many people whose funds are invested in trustee and other securities. The position may be summarised as follows: (1) The first mortgage over the whole of. New Zealand's assets is the overseas debt. The volume of this debt is increasing, though not so quickly as heretofore. (2) The second mortgage over our assets is the internal national debt. The volume of this debt is increasing rapidly. (3) The third mortgage over' our assets is public body debt. The volume of this debt is increasing, though not so quickly as heretofore. (4) Private and institutional mortgages on land in New Zealand, therefore, can only be classified, as fourth <lass and must be rated accordingly., Aβ the volume of debt under classes 1 to-3 increases, the security of fourth : ciass investments must correspondingly decrease. " Consequently, we will find that proportionately as the farmer's interest burden is reduced under his four-class obligations, his burden under classes 1 to 3 will be increased. The Minister of Finance is armed with power to borrow more millions, and every new borrowing will add to the farmer's total obligations, while at the same time it will have a corresponding depressing effect upon fourth-class investments. In fact the Minister's policy is one which tends to destroy the incomes of widows, retired people and others whose livelihood' depends upon private and institutional invest- ' ■meiits upon land situated in New Zealand. It seems that the Minister will succeed only in adding a new class of pauperism to increasing unemployment and that the people who will be adversely affected are those who may find it impossible to make good their loss of income. P. B. FITZBERBEHT.