MORTGAGE FINANCE

Press, Volume LXXI, Issue 21400, 16 February 1935, Page 9

MORTGAGE FINANCE

TO THE EDITOR OF THE PRESS. Sir,—Two well reasoned letters have recently appeared in your columns putting .forward the mortgagees' case, and it appears to me that they are genuinely desirous of also hearing the other side, so I will endeavour briefly to put some of the favourable arguments for the contemplated legislation. Farmers have been roughly put into three classc?, namely, land speculators, land accumulators, and genuine hardworking ;mall farmers who find their means of livelihood gone owing to unduly low prices. It is admitted that the last class call for sympathetic treatment. I would ask how any court of law would be able to classify them. Presumably the onus of proof in the first two cases would be on" the mortgagee. A farmer may accumulate land owing to having a large family with a view to ultimately settling some of his sons, or else he may have a pastoral holding and think that he could work it better if he purchased agricultural land as well. Both reasons would be quite legitimate, and no doubt there are many others. Personally, I do not think that there has been much speculation since 1920. Many speculators get caught then and lost their properties. Others realised in time and the proceeds no doubt exist to-day in many cases in the form of mortgages upon which the harassed farmer finds great difficulty in paying interest. If farmers are to be divided into classes such as mentioned, is it not just that mortgagees should be also classified, but,if that were done the whole thing would drift into a maze of legal difficulties. The thing will have to be drawn on broad lines,, and I suppose some injustice to both mortgagees and mortgagors will be inevitable. Complaint has been made that under the Chamber of Commerce scheme the secured creditor gets nothing until all other expenses have been paid. Well the secured creditor has really been transformed to a certain degree of ownership, and the doubtful privilege of ownership, as farmers have found out, is to pay everybody else first and be content with what is over. If there is a deficit one year and a credit the next, the scheme allows the deficit to be met by the succeeding credit, just the same as in ownership. Before granting a mortgage no doubt the capabilities of the owner are considered, but under English law no owner can be tied to the land. The recent - contention of the Wellington Chamber of Commerce that a capable farmer'should have to pay a higher rental is astounding. It reverts back to the days of serfdom, and really regards a man as a chattel of the land. Under English law a man cannot be forced to remain in debt all his life. He simply has to hand his property over, and is usually granted a [' quick clearance. The Government view is that it is nationally undesirable that farmers should be forced to realise and vacate their holdings, and if they keep them they are entitled to ask that it is not in a state of perpetual insolvency. It is incorrect to say that mortgagees have been selected to be the real victims of the slump. The farmer . loses all his equity unless this bill preserves a small portion of it before the mortgages loses a penny. In the case cf a national disastef why insist that one man must lose everything before another gets touched at all.— Yours, etc., ' T.V.W. February 14, 1935.