FARM MORTGAGES

Press, Volume LXIX, Issue 20957, 11 September 1933, Page 7

FARM MORTGAGES

TO TUB EDITOR OV THE PRESS. , Sir, —I wish to congratulate "Ex- . Farmer" on his views oil farm mortl gages and would have liked to have [ seen further correspondence on this < matter. Why lend money on land 5 when the stock firms take the pro- * ceeds under the chattels security and leave the mortgagee liable for rates, ; insurance, and land tax. Under the ■ Chamber of Commerce farmers' ' finance scheme it seems to be "Heads ■ I win, and tails you lose," as there | are cases where farmers have paid 1 their way but the stock firms have ■ taken everything. i Legislation is long overdue to cur- , tail some of the protection that has [ been given stock firms in their mort- . gages, which has practically given them a brick wall of security. In a [ recent document I saw there was a > clause demanding commission on un- , sold chattels after an account was • paid off. If farmers' finance had been left to proper banking institutions the slump in . New Zealand to-day would ■ not have been so severe, as the stock., : firms have been greedy for commis- ■ sion on sales of land and stock at I boom prices, and unable to stand a ■ five-minute depression. The high rate : of interest, 8 per cent., and no reduc- ! tion, when other mortgagees have had ■ to reduce their interest and rent 25 ■ per cent., has put men in unemployed ■ camps whose life savings have gone into the land to make a home. There is commission on all stock sold or put into the works, and profit on all necessities used in working the farm. In some cases this amounts to 25 per cent, per annum of the capital turnover, and the result is an impossible position for the mortgagor. In regard to the Mortgagors and . Tenants Relief Act, apparently it applies only to the private mortgagee, ; and the stock firms do not come into it. As the firms force the mortgagor to appeal to the commission, everything is held up but the necessary running work. The firms then step in and take everything. There are cases o£ directors of firms borrowing money from these concerns, and the clients are now paying for these mistakes; surely this should be prohibited? If firms want to base the value of mortgage on the productive value of the land rather than the sale value, why not reduce their present mortgage to the same basis, and give the farmers a chance, as the firms have lost nothing yet and made no sacrifice as the farmer has during the last few years.—Yours, etc., FARMER. September 6, 1933.