ROUND AND ABOUT

Auckland Star, Volume LXVI, Issue 272, 16 November 1935, Page 15

ROUND AND ABOUT

JOTTINGS FROM A JOURNAL AN ENGLISHMAN IN N.Z. THE ECONOMIC POSITION. The scenes and! characters in these sketches are imaginary, bu't are founded upon the author's recent experiences in the North Island. L Oliver wa3 chatting with a solicitor to whom he had an introduction from friends in England. The solicitor was small and neat, like his office. His name was Davis. "Well, now," said Davis, "if you're really interested in New Zealand affairs you'd better wait while I see my next client, a mortgagor farmer named Smith. He won't mind and you'll learn a lot." As he spoke a tall, mddle-aged man was u&liered in. Davis greeted him. and introduced Oliver. Smith pulled up a chair, and straightway launched out into a considerable indictment of the Government on account of its rural finance legislation. Pity the Poor Mortgagor! "And what I want to know is just where I stand," lie finished. Davis placed his finger-tips together in the approved style of the stage lawyer. "Let us start at the beginning then," he said. "In 1928 you borrowed £7000 on a contributory mortgage. You wanted to buy a farm. You have not paid off any of the capital and you are considerably in arrears with your interest. The crude position, therefore, is that you owe over £7000.'"Well, but—." The solicitor sighed. "I spend so much of my 'time trying to make people realise that a mortgagee is not a sort of partner of the mortgagor for the purpose of sharing loeses. The relationship is purely one of debtor and creditor; you are the debtor. Now, i unless the present price of butterfat j rises about 300 per cent you cannot 1 make a living and pay the mortgage interest as it becomes due —much less I repay any of the principal." "You're right," assented Smith. "Accordingly, the Government has come to your assistance. In the first place it encourages you and your mortgagees to come to a friendly settlement between yourselves." "But haven't we tried —1" Davis waved a slender hand. "In yo*ur case there can bo no agreement because, unfortunately, your mortgagees are II widows. The truth of the position is that you are insolvent, Mr. Smith. The Government has provided a sort of special, and I may add, specially favourable form of bankruptcy proceedings for you—that's* really what it comes to. You will continue to work for five years; the Government will keep an eye On you during that time. You will be allowed reasonable living | and working expenses and, as is only fair, if any income remains after that, it will go to your creditors. At the end of the five years the amount of your mortgage will be scaled down to the productive value of your land; and, mark this, the productive value is the net income after deducting living and working expenses, and rates and taxes and interest on the average value of your farm stock and chattels. A very generous treatment, I think." "Hm," said Smith. "And what about my other creditors?" "If you have any assets other than your farm property, they will be distributed among them and you will then be able to ask for an order wiping out all your remaining debts." "And wliat do I get out of it?

Oliver smiled grimly. He seemed to havo heard those significant words before. "You will get a living and get out of debt at tho same time," replied Davis. "And at tlie present moment," Oliver put in, "you owe far more tlian yo" r land js worth,. 60 you haven t anything at alii" Smith rose to his feet. "Thank you, Mr. Davis, for explaining. But if you or the Government think that I'm going to slave for five years for my mortgagees working on a budget of my own land you re mistaken; I'll take pretty good care to see that, after my living and working expenses have been paid, there s 110 income left at all; and all the Government inspectors and accountants and busybodies in the world won t find out where the leakage is, either! He stamped out of the room. V It Happened in Rome. Oliver" lit a cigarette slowly. "What can vou do with a man like that?" he asked. "What the deuce does he want the Government to do?' "Oh" replied Davis, "he wants a heavy' subsidy in the form of guaranteed • prices or the land given back to him entirely free from the mortgage; preferably both." Oliver smoked in silence for a few minutes. Then he said: "I see that you're an admirer of the Government's steps in connection with rural finance and mortgages." "You are wrong," returned Davis. "It's all very well for the farmers, and, if you look at it in the right way, for the mortgagees, too. But I hato it myself."

"Why.?" "Firtt of all, this direct interference with": the. right of private contract chocks the conscience of a lawyer. It's wrong and it's -dangerous. Such a thing is quite* new to history." Oliver laughed. "That's not l;ight,"' he said. "When you wore at school did you ever read j Caesar ?" , I "That's a very long time. ago . . . How did,., it: run? ... 'Caesar, haying crossed ihtb Transalpine, Gaul, went into ! winter quarters,' wasn't it?" I "There's'more to it than that. Let me remind you. When Caesar became Consul he found that public credit was at a standstill all over Italy because people couldn't pay their debts. So he sot up an adjustment, commission to reduce all values to what they'had been before the war which had just come to an end. He wanted to,allay the widespread apprehension of a general abolition of debts. At the same time the Praetor at Rome set up a tribunal to hear people who couldn't pay their interest, on the plea of poverty, personal losses, the hardness of the times and the difficulty of realising their assets. The result of this was a law allowing everyone six years in which to pay oil tlier debts and the cancellation of all interest. Doesn't the remarkable similarity of our position to-day and the Government's steps strike you?" •

"Yes," admitted. Davis. "We don't seem to have progressed much in two | thousand years." 9 "And you observe the> interference j with ' private contracts—debts ?" | "I do." . .. J "Well, it does seem to me that if I Rome, the greatest lawgiver of all j times, was driven to take such steps | in a time of national emergency, New | Zealand lawyers need not be unduly I alarmed because their Government js | ■doing almost exactly the same thing." | "It's very interesting." | "It is," went on Oliver. "It's also j not withotit interest to note that a j gentleman named Milo, who was leader | of the Opposition, tried to stir up dis- j content among the farmers. The Roman | Government, having a more drastic way j of dealing with opposition than we have I with the Labour party, put him to 1 death. Rome emerged triumphant from I her troubles, and so will New Zealand j if people will just think quietly and not j talk so loudly." | "You may be right. . . . ." j Oliver looked at Davis steadily. | "Now that I've shown you that your J conscience as a lawyer need not be | shocked, what's the other thing about this mortgage business you don't like?" Davis hesitated. "Well' it's like this," he said. "We j poor devils of lawyers have a hard I enough struggle to-day, and if the J Government's going to take mortgage | business away from us and we lose I negotiating and conveyancing fees . . " I His voice trailed off. J "What am I going to get out of it?" | said Oliver softly. § "I beg your pardon." gj "Nothing. I see. Well, I've taken up | a lot of your time." I "Not at all," said Davis. "Tell you what—two of Smith's mortgagees, two of the widows, are coming shortly. Like to stay and hear me deal with them? I don't suppose they'll object." ' Oliver expressed his thanks. "Good, let's have some tea before they come." lie rang/a bell. Pity the Poor Mortgagee I The widows were sisters, but here the resemblance ended. Mrs. Grey was large and dark, and her eyes flittered like red-hot coals. Mrs. Brown was petite, pallid and pathetic. Oliver sat at the back of the room trying to look like a solicitor's clerk. Davis asked j the ladies about Oliver. I "Wo have nothing to hide," declared, j Mrs. Grey. "What we wish to say j should be proclaimed from the house- | tops." "You want to see me about four money?" suggested Davis. "Our lack of money." Davis' fingertips sought each other's support again. "I knowi what you're going to say, I Mrs. Grey; let's try and get the position | clear." | Mrs. Grey looked at her sister as much B as to say, "Oh, well, let the man have J his say." Davis, unabashed, continue'd: I "Seven years ago you and your sister I

each contributed £1000 towards a con- | tributory mortgage of £7000 for George 9 Smith. Everyone then believed that the 8 land was worth at least £9500 and with 9 butterfat at its then figure it was worth J it. Also, Smith could pay you 0 per cent I interest out of his earnings from the | farm. With the fall in prices the land | is worth less than £4000. Therefore, you | have lost six or seven hundred pounds I out of your original thousand. He's got 8 absolutely nothing except his land and | he's a good, hard-working farmer, so | it's no good turning him out and putting | in a manager." |

Mrs. Grey snorted sceptically. "Well, is it?" said Davis, looking at her, his head on one side. -"Eleven women can't very well take possession and farm the land themselves, can they? If you turned Smith out you'd have to pay a manager, which would mean more money out of pocket for all of you." t "1 ve lent-a man* money and I want him to pay it back. Goodness me, I'm not asking much," said Mrs. Grey vehemently.

"Well, he can't pay it back and he | can't even pay you interest on it," | answered Davis. "So what are you <roiiif it to do about it?" °|

"Iliat's the advice we pay you to give us," pointed out Mrs." Grey shrewdly.

Davis was not in the feast discon-! i certcd. He regarded his finger nails. And I'm telling you," lie replied. "You ! co-mortgagees, or some of you, j won t lie reasonable and cut your losses i by making a sensible arrangement with ' Smith, so the Government's going to step in and make you. The only way in which you can possibly be the losers under the Government's scheme is if butterfat went back to boom prices again, for in that unlikely event Smith might perhaps make enough money to | pay "P all the arrears of interest and lie might possibly be able to re-finance ~~ the mortgage and pay you back in full. But everyone knows that such a thing M is extremely unlikely and what would |] be the good of hanging on like this and || piling up more arrears on such a dis- II tant and far-fetched hope? No, you've It made a bad bargain, and if you won't If try and make the best of it, the Govern- fff nient's going to make you." If Mi's. Brown cleared her throat. §1 "I told you so, Poppy," said she, gf triumphantly. II Mrs. Grey stared at her sister || aggressively; her feet beat restlessly on H the bare floor. || "Very well," she said. "Then there's |j nothing to do except to see that the f| Government of robbers is r(nnoved from its infamous tenure of oll'ice in the S spring." || No Alternative. || Oliver coughed dnprccatingly. §■ "May I suggest, madam," he ventured, :J "that any other party might prove to have . . . er . . . more pronounced ways compared with Mr. Forbes' vj -Administration." if Mrs. Grey glared at him. Ho went | on: p "I doubt whether you yourself would j| gain very much out of increased Govern- & mental spending with its consequent increase in taxation; or.by the nationalisation of the means of production —the I land, for instance?" "If you do not' support the Govern- — ment to the best of your ability you | are simply inviting a Labour party to try its apprentice and inexperienced hand on thg socialisation of the country."' V "I told you so, Poppy," said Mrs. Brown timidly. Mrs. Grey rose majestically to her feet. | ,"I am obliged to you, Mr. Davis, for the clear exposition of my position." She turned to Oliver: "And as for you, sir, I am not a weak woman—" Oliver smiled to himself. "And I am not in the habit of changing my mind. But I see from your brief but forceful remarks that I have done the Government an injustice.. I shall send Mr. Forbes a post card to _ that effect . . . Come along, Fanny." g Both ladies withdraw. | Oliver and Davis stared at each other ™ in astonishment. r 'KVlost refreshing!" remarked Davis lighting a cigarette. 1_