MORTGAGE VALUES

Dominion, Volume 29, Issue 185, 4 May 1936, Page 8

MORTGAGE VALUES

Guaranteed Prices the Basis TWO NEW MAJOR BILLS State Will Take Over Corporation ALL MORTGAGES AFFECTED Two mortgage bills giving effect the Government’s policy of hasmg mortgage values on the guaranteed price for dairy products are expected to bo introduced in the House of Representatives In the near future. One will provide for the taking over by the Government of the Mortgage Corporation and its remodelling along the lines of the State Advances Department, while the other measure, according to present indications, will he much wider in its scope, and will deal with the mortgage question as a whole, laying down, in all probability, an entirely now scale of values. Some doubt exists as to when the new legislation will be ready for presentation in the House, according to a statement made on Saturday by the Prime Minister, Rt. Hon. M. J. Savage. Both Bills would be bandied by the Minister of Finance, Hon. W. Nash, the Prime Minister added, and as the Government regarded them as a vital part of the guaranteed-price machinery they would certainly come within the scope of urgent legislation. The Government intended to take over the Mortgage Corporation lock, stock and barrel, Mr. Savage continued. In much the same manner as it had assumed full control over the Reserve Bank. However, there would be certain differences in methods and results. Private capital would be bought out, but, as in the case of the Reserve Bank, private shareholders in the corporation would not be the losers by the transaction. The reorganised corporation would be made to take control of all the State’s lending activities. Future of Directors. Mr. Savage declined to discuss the future of the directors of the corporation, but, although the Prime Minister did not say so, it is gathered that use will continue to be made of the expert knowledge of the present joint managalng directors, Mr. A. D. Park and Mr. T. N. Smallwood. The second Bill, the Prime Minister said, would provide for all mortgages to be based on the guaranteed price which the Government proposes to pay to dairy-farmers. In taking that action, the Government held that it was considering equally the position both of mortgagors and mortgagees. It would provide a definite basis of security. At present some mortgages were based on about 2/6 a pound for butter, when the return to the farmer was about 1/-. That position was manifestly impossible, and It would be the object of the Government’s. legislation to rectify it as soon as possible. “The state of affairs at present is just as hopeless for the mortgagee as it is for the mortgagor,” Mr. Savage continued. ‘‘The man who has lent money at high values cannot possibly hope to continue in that position without a war or a boom coming to drive up values. Wo are not legislating for wars or booms. We are legislating on the basis of what an average man can be expected to do under average conditions. The guaranteed price will be based on that, and mortgages will be based on the guaranteed price. “One thing is certain —neither the mortgagee nor the mortgagor can make more than what comes out of the ground. We are going to see to it that production is made to count." New Valuations. Mr. Savage stated that, under the proposed legislation, new valuations would be made right through the Dominion on the basis of the guaranteed price. At present representatives of the four State departments concerned, under the chairmanship of the actingPublic Service Commissioner, Mr. A. D. Thomson, were, making investigations regarding the field staff likely to be required and other matters of a general preliminary nature. Under the Government’s scheme, Mr. Savage added, the proposed procedure would apply to all mortgages, whether rural or urban. The fact that the guaranteed price for dairy produce was to be taken as a basis did not mean that only mortgages on dairy farms were to be considered. Guaranteed prices might be extended later to other forms of primary production, but the present position of wool and meat was satisfactory, and the necessity did not arise.