Mortgage Corporation

Dominion, Volume 28, Issue 115, 8 February 1935, Page 7

Mortgage Corporation

Sir, —In all probability every one of your readers has read with the greatest interest the criticism, by investment interests of the suggested proposals. At present, the country may' be generally divided into two sections, lenders and borrowers, and- it is just as well to bear in mind that, just as one cannot exist without the other, so justice must be done by lenders to borrowers, and by lenders among themselves. If we get down to bedrock, the crux of the matter is that to-day there is no market for mortgages. That is the real secret. If there was a market and those investing institutions who speak of having plenty of money to lend at low rates were even to start and help needy mortgagees of their owrf class, then there might be no call for a national effort to defrost all the frozen mortgage capital. They have no reason to wait for Mr. Coates to address meetings. There is no reason why they cannot get busy on their own account at once.

Where the deadlock has come, however, is that lending institutions generally will not lend on mortgage securities at all, and the widows and others so often spoken of in this connection who cannot live on interest coming in, are denied even a chance to live on capital. Ample and cheap money is mentioned. Now, if this cheap money is about, where is it? Have any offers to lend it been advertised? Do the Mortgagor Commissions know about it? If they did, then their decisions as complained of might be altered. The fact of the matter is that everyone throughout the whole country has been waiting for someone else to make the first move, hoping, but possibly quite vainly, that the man who got out last would get out best. There will have to be big sacrifices made if we do not get together and plan to minimise them, and without some plan mortgagees generally will be doubly hit. and not unjustly. The depression has lasted five years now and, without in any way depreciating the manner in which capital has carried the borrower generally it is not unfair to ask: What has “money” done to assist recovery? It has eased interest burdens certainly, but only after extreme or legislative pressure. It put by “reserves” in the good times for just such an occasion as this and now declines to use them.

After all, invested capital lives in the country, grows in the country, and was kept safe during the -war by the men of the country. That being the case, does it or does it not owe something in return? I think it does. At the present time if it doesn’t like a Mortgage Corporation, what is to stop it organising a mortgage market bn its own terms, and helping out those who need to raise funds on their mortgage investment? If they won’t do it, and do it on terms and money rates which make borrowing a business possibility for both producer and wageearning house-owner, is there any reason why the borrowing section and the internal trade of the whole Dominion should be frozen up indefinitely—the case at present? Those days are past. The Government has a duty in this matter and mortgage interests have no cause for complaint if Mr. Coates or any one else game enough and with sufficient vision, steps in and makes a straight-out bid to lift trade and the moratorium in an endeavour to turn the corner in the interests -of all by the suggested Corporation. No doubt if the same committee were professionally engaged to state the case for borrowers they would, and could, write as good and probably a more useful criticism from that point of view. The producer must stay on his farm where at all possible, or be fed by the State, which is an investor in another form. What is wrong with investors generally, showing equal faith in their country and seeing it through? If we had to sink, all would sink together: so that a plan to float is well worth while. —I am, etc., ADD HANDS ON DECK. Wanganui, February 5.