The Dominion. FRIDAY, FEBRUARY 15, 1935. MORTGAGE FINANCE PROPOSALS

Dominion, Volume 28, Issue 121, 15 February 1935, Page 10

The Dominion. FRIDAY, FEBRUARY 15, 1935. MORTGAGE FINANCE PROPOSALS

It can be said for the Minister of Finance that he has carried out his undertaking to consider suggestions of a practical nature and make amendments where deemed advisable in his National Mortgage Corporation proposals. Amendments have been made in the scheme as originally submitted, but these are in matters of detail. The principle remains unchanged, and represents another incursion into Stale Socialism. Some of the changes made are of importance, notably, the increase in the margin of security to be required (save in special circumstances in which a State guarantee is to be provided), where advances are made. Previously it was proposed to advance up to 70 per cent, of the value of an approved security; now this is reduced to 66 2-3 per cent. The limitation 9f the bond issue to 15, times the capital and reserves held instead of 20 will also be regarded as a sound step, and is another improvement in detail. But it' is still very apparent that in order to give effect to the provisions of the Bill as drafted heavy losses in the existing State lending departments will have to be faced, and met by the taxpayers of the What assurance can .be given that such losses will not be repeated in the future? A further danger which has been foreseen has been made evident to-day in the pronouncement of the Deader of the Opposition, Mr. Savage. In stating the views of the Labour Party Mr. Savage shows clearly enough what will be the next step in the his party ever come into office. “Why,” he asks in effect, should this mortgage institution borrow money to lend on mortgage? Why not create it?”.- In other words, why not set the presses.of the State Printing Department going, producing, paper money ad lib. Naturally the Dabour Party would make the scheme a straight-out State ventureand it would print as much paper money as might be required to finance it. W . . This is no fanciful picture. It is the expressed desire, and, if opportunity affords, the intention of the Dabour Party as voiced by its leader. The Government Mortgage Corporation plan has provided' the groundwork for this policy and the Dabour Party hopes to make use of it in due course. It has been stressed from time to time in criticism of the Government mortgage reform proposals, that though the objects in view had much to commend them the dangers of fhp methods outlined 'for attaining them were in some cases very apparent and in others, though less apparent, nevertheless very real. lhe pronouncement by the Deader of the Opposition to-day serves to show very definitely that this criticism was by no means exaggerated, and that in given circumstances'the Mortgage Corporation might be made a medium for flooding the country with “created” money turned out on printing presses in just as many millions as the occasion might seem to require.