THE MORATORIUM.

Press, Volume LX, Issue 18150, 13 August 1924, Page 10

THE MORATORIUM.

BILL BEFORE HOUSE. SECOND READING CARRIED. MR WILFORD'S AMENDMENT REJECTED. • (ABRIDQZD PBESS ASSOCIATION fiBPOBT.) WELLINGTON, August 12. In- the House of Representatives to--night; "Mr ' Massey- moved the second reading of the Mortgages Final Extension Bill. In doing so, ho traced the history of what is commonly called the T: moratorium, and its various amendments since its inception until now. The position was that the moratorium, as. it stood to-day, would expire on December 31st, 1924, and the question had arisen what was the bestthing to do for the future. ' There was a very general opinion that the moratorium was doing more harm than good, because it was having the effect of making it difficult to get lenders to advance money on land. They preferred to lend .to local bodies from whom the interest was easier to collect. In that way local bodies were coining into competition with farmers. Then .there was. the ery—the exceedingly foolish cry—that thousands of farmers were walking off farms. That was not true. He had recently been through three of the largest provinces in New 'Zealand, and he saw no signs of farmers walking off their farms in large numbers. Some had to give in, but surrender was not general, and it was a gross exaggeration to say anything to the contrary.. It was no use going about the country crying "stinking fish;" It'would be-better to make the best of the circumstances and tell the people to take their coats off and make a special effort and they would pull- through, if we got a succession of seasons such as we had just experienced. Money was cheaper here than in Australia, in support of which statement he quoted a series of Australian quotations. The bill before the House reversed its position under the present law. The mortgagor would have to go to a judge of the Supreme •Court and apply for a continuance of the moratorium in his case. He would have to show that he had a reasonable chance of recovering his position within a reasonable time. It was not necessary for him to go through all the clauses, because there was only one. principle in the Bill: whether there should be an extension at all. There, would be several amendments, one of which -would probablv bo the substitu-t'-Hi of March" 31st," 1925, instead of December 31st,, 1924, as the date for the expiry of the moratorium, and . for this there was. a great deal to be said. lii reply"to Mr Langstone, Mr Massey said it was impossible to say what "amount of money was involved under the moratorium. Mr Wilford said that last year, ho had. asked the Prime Minister if he would procure the information asked for in'the question just answered, bir! - it was not forthcoming, and therefore the House had'ho opportunity of judging the necessity for the present Bill. People had been told that the State Advances Department would meet all the farmers' requirements, but the Department had failed./' ..It was an excellent Department, but it had nothing to feed it, and so this Bill was brought down to fill the gap., He regarded it as a stupid proposal to lift the moratorium at present, when there was no money in the country. It would have the effect of lifting rates ,of interest to those of the bad old days, when anything from eight to twelve per cent, was the rule. Wherever he went throughout the country the cry was, "Do not let the moratorium be liftel till we can get a chance to recover. " Every big financier was in favour of this Bill. It followed the suggestion made by the acting-chairman of the Bank of New Zealand, and that was where it came from. The Bill would simply throw many farmers to " the financial wolves, and there would be tragedies which we did not wish to see. • His own suggestion was that the Prime Minister should bring down, not this Bill, but an amendment to the Act extending the moratorium for a further eighteen months, and at the | same time • providing for the amendj mentof the Statute of Limitations. He moved an amendment to that effect. The Hon." A. D. McLeod said this was serious legislation, but he was fully satisfied that the. moratorium was doing more harm than good, and should be terminated. It was all . nonsense to say that agricultural banks would meet the position, for precisely the same difficulties, which had faced the Advances Department would also face agricultural- banks. What would do good among farmers ..would, .be long-dated loans. Reference to the banks waiting, to jump valuable properties might be all very well as a political statement, but it did not count for mucli otherwise, because everyone knew that this was not the class of business done by the banks., He knew the position was serious, but it would be more serious to continue 'the moratorium than to terminate it.

Mr G. W. Forbes (Hurunui). favoured the extension of the moratorium , for eighteen months, and censured the Prime Minister for not being able, to tell the House how many mortgages and how much money was affected by 7 the moratorium. The Advances Department had failed to meet urgent eases, and as the Government let these .people down the moratorium should be extended until such, time as the Government was in a position', to meet farmers-' needs.

Mr Massey, speaking to the amendment, said he regretted that an attempt -was being made to manufacture party capital out of farmers' necessities. It was quite evident what • was going on. Farm lands were not in favour as security to-day, and if the moratorium was extended,. the position "would be infinitely worse. The . Advances Department had been spoken of with derision, but what-were the facts? Since the present Act came into operation there had been-over ten thousand applications; eight and a half millions had been authorised, and' had been paid • out. ~ As to the future he had several millions'in sight, but he was not going to put all this money on the market at onee and so create a boom. The Advances Department was a, wonderful Department, and no agricultural bank could: do "business anything like it- The carrying of the ' amendment'wohild"be the' worst possible I thing that could, happen. .'•'.•..Mr 1L..~E., Holland" (Buller). said . the Q.jj.ly ptincipie'in the Bill was.the ex-tension-of the moratorium tbvthc mo'rt- . gagor ■vv-ho..«ouid satisfy the. Supreme Court. that. it-, should be-, extended. '. : At -the_.sanie tinie the. Bill made "no provision for. a-le'du'ction .in ,the" interest charges whjchi-farmers had to pay. "On- ■\ kj» '" some such relief- was:' given, the Bjll .would: ibe useless. He-would, support the -_ - Amendment," although*, .'he • recognised its/ limitation- in, that it did not proviso for the reduction of interest an y^pre did. The Labour Party's policy was that in cases | where the discharge of a mortgage had not been effected, of securities should be made -and the mortgage

taken over by the State on the basis of real value. Revaluations should be made by district .boards, which should be thoroughly representative of the finance of mortgages as between borrowers and the State. They should be arranged by the Minister of Finance, who should be authorised to raise, .the "money necessary, . provided that not more than' six millions were raised in any one year. The Labour Party did not wish to see any bona fide farmer driven off the land. It was not proposed to destroy values which existed, .but ; what they would get rid of was fictitious values. He begged the Prime . Minister not to rush this Bill, but to let the intelligence of the House consider it with .calmness and . deliberation.

Mr "W. Lysnar (Gisborne) said the Bill was not in itself sufficient. Time must be- given, the taxation on mortgages and debentures must be revised, and better channels of finance must be given to -settlers. He would vote for the Bill and' against the amendment. Mr M. J. Savage (Auckland West) supported the idea of district revaluation boards for the purpose of arriving at real values, and giving men who were real triers the chance to carry

Mr J. A. Young (Waikato) said lots of people had speculated with money which they should' have used to pay off their debts, and the Moratorium should be ended in terms of the Bill, but he hoped that the procedure before the Supreme Court would be mad* as simple and cheap as possible. He did-not approve of the Moratorium terminating on December 31st, but favoured- extending the period to later than March 31st next if possible. Mr T. K. Sidey (Dunedin South) said the Bill proposed to extend the Moratorium in certain cases until 1926. This was an admission on the part of the Bill itself that the time had not come when the Moratorium should ba lifted.'

Mr W. H. Field (Otaki) said it was just as. serious a thing for many mortgagees that the Moratorium should be extended as it was for many mortga gors that it should be closed. The Bill was an honest attempt to meet. this position.. The real remedy, however, was more money for settlers. The trouble in . New Zealand was that our people were paying interest on inflated values. In many cases it. would be a real mercy, to end the worry of farmers who. had no chance: of recovering by terminating the Moratorium. The position might be aided by adjusting the taxation on debentures, and so diverting money to farm lands. Mr W. E. Parry (Auckland Central) said the only solution of the problem was that offered" by the leader of the Labour Party. All other ways of dealing with the question were only walking round the edge ; of it. The Hon. C. J. Parr said all the countries in the world were endeavouring to get their' legislation back to normal conditions. New Zealand was the last country to lift the Moratorium. Mortgagors would receive fair play in the Supreme Court. If they could no: satisfy the Court they could carry on and get through, then their position was pretty hopeless. Could it be seriously argued that the State should take over such mortgages? Mr Ranson said that any farmer who paid high rates of interest and came through the slump was deserving of a further chance, and he would support the amendment to afford an opportunity of giving the whole matter further consideration, particularly m the direction of classifying mortgages.

At 1.5 a.m. a division was taken on Mr Wilford's amendment, which was rejected by 33 votes to 25. The Bill was then read a second time and referred to the Public Accounts Committee. ■,••.., ■The House rose at 1.12 a,m.