DIFFICULTY AND DANGER

Evening Post, Volume CXI, Issue 84, 10 April 1931, Page 8

DIFFICULTY AND DANGER

In seeking to escape from difficulty the Government is treading dangerous ground with the Mortgagors' Relief Bill. The measure is much more limited in scope than the Mortgages Extension Act of wartime, which effected so much harm to rural finance. It does not provide a blanket moratorium, and its relief is available to the mortgagor only if a Judge or Magistrate grants his application. Moreover, the measure will not necessarily operate immediately it is passed, but only if a proclamation is issued. These modifications suggest that the Government has been doubtful of interfering in mortgage contracts, and has sought to qualify that interference as far as possible. Even so, we share the fears of the Labour member for Raglan, Mr. Martin, who, while supporting the Bill and regretting it had not been introduced before, said he was not sure that it would be beneficial in the long run to primary producers, for he believed that it would tend to make investors in rural security shy clear, believing that rural securities were not as good as they should be. This is the principal point to be remembered in considering such legislation. For years producers have complained that money did not flow freely to them. Its flow was checked by lack of confidence. Now the rural investor is faced with the risk of depreciation in security which he faced formerly (a risk common in various degrees to all forms of investment), and the additional risk that he may be debarred from recovering what value remains. The Government obviously intends that this risk shall be as little as possible and that it shall apply only to the mortgagee who proposes to exercise his contract rights harshly. _But this mitigation of effects will not remove completely the disturbing effect of the interference. We may, however, be grateful that the Government has shown no disposition whatever to follow the advice of Mr. Lysnar and authorise adjustment of principal and interest. It is strange that one so utterly opposed to the New Zealand Labour Party as Mr.. Lysnar is should out-Herod Herod on this subject and find his model in Mr. Lang.