THE MORTGAGE LEGISLATION

Press, Volume LXXI, Issue 21436, 30 March 1935, Page 18

THE MORTGAGE LEGISLATION

to rrtK f.ditox ot the ruRS-s. Sir. —So far neither "Disillusioned' nor anybody else has explained to me whv the written contract must bo i-acrcd in all circumstances when it is interna!, but when it is external, such as the debt between England and America, circumstances can justify its ebrogaticn.

"Disillusioned'' contends that the returned men took up land with then eyes opened. I suppose that they had their eyes opened as wide afe "Disillusioned's" were when he sold his farm and took a second mortgage. Then he wants to know what they did with their surplus profits. He forgets that there was a severe slump extending lor several years from 1921 on. In that period heavy arrears piled up, necessitating another period of several years to even up. The bit of profit that it may have been possible to make in the remaining period before 1930 could be swallowed whole and never noticed in a dozen legitimate ways. For instance, there are few properties, especially recently acquired or subdivided ones, which could not do with some improvements. Possibly a little was paid off the mortgage; but it could only reasonably be expected to be a drop in the bucket as compared with th? landslide of 1930 onwards. It has been contended by Mr Downic Stewart ar.c* the Associated Chambers of Commerce and so on that the average mortgagee will not put an efficient farmer off his farm. I agreed, providing that they could pick one when they saw him, which I doubted in some cases, but added that many would keep the farmer insolvent for the rest of his lifetime, which is repugnant to British law, as demonstrated bv the Bankruptcy Act. Whether the efficient farmer goes off his farm by filing for his own protection or is put off by the mortgagee is immaterial, so far as they key industry of the State is concerned. That point has not been sufficiently stressed so far, owing to the reasons (mentioned in my previous letter) that make the farmer loath to take advantage of the act. While on that subject I may state that there has been considerable confusion of thought by other correspondents ou that subject. It has been implied that the Government is unduly favouring a certain section of the people. It is not; it is only favouring a certain industry, which it conceives to be the country's key industry and which it cannot allow to be jeopardised. Nearly every other nation in the world is doing the same thing, one way or another. To get the bsst returns a sheep run demands an efficient farmer and a flock adapted to the place and the run itself. If the owner has to protect himself from life-long insolvency by filing, the whole lot is likely to go to the four winds. That is conceived to be against the public interest, and this legislation is really an amendment of the Bankruptcy Act with a valuation instead of a liquidation, purely in the State's interest. That argument applies to farms as well as sheep runs, although perhaps to a slightly less extent. Before closing I would like to refer to a contributor, "X," who has been sending in articles on another page. He depicts thv harrowing picture of a widow mortgagee's difficulties under this legislation. Well, as I see it, the lady's position would be nearly as harrowing without it. Perhaps a third of the mortgage, lost through a forced sale, selling and legal costs, the remainder of the money reinvested at 4 to 4i per cent., would be a very big cut on her income. On top of that another harrowing tale would have to be told about the people who had been put out. I might never have entered this controversy if "Disillusioned" had not accused the farming community without qualification of lacking in "guts." to use his military phraseology. He now denies that he said he possessed more of that commodity than his former comrades now on the land, but they form a considerable proportion of the farming community asking for and requiring relief, and his words imply the meaning I took out of them. —Yours, etc.. T,V.W. Mitcham. March 27, 1935.