PRINCIPLES AND PRACTICE

Evening Post, Volume CXIV, Issue 103, 28 October 1932, Page 6

PRINCIPLES AND PRACTICE

» • "A generation is growing up which understands a mortgage to be a document signed by a mortgagor containing an implied, covenant by the mortgagee agreeing > to a moratbrium." This cynical declaration of a legal authority was quoted yesterday by the chairman of the Guardian Trust Company's meeting in Auckland. Unfortunately there is at least a grain of truth, as well as humour, in the statement. The general public attitude toward contractual obligations is far from satisfactory. Dire necessity, may be pleaded as a reason for revision of a contract; but we are tending toward the point when1 a breach will be held justifiable merely because it is .convenient to one party. The Government cannot escape< its share of the blame for this tendency. Some of its legislation, sanctioning and even enforcing breaches of contract, has forged links in the vicious circle chain to' which a correspondent referred yesterday. As the writer stated, the first interference with contracts has -led ', to more. The proposal to prevent local bodies removing sinking funds from the Public Trust 'Office, as we showed at the time, is the direct consequence of earlier mortgage-suspen-sion and interest-reduction legislation. " ' We have held much of this legislation to be wrong and short-sighted, and we regret that in defending it the Prime Minister has used' language which is open to misinterpretation. Mr. Forbes referred yesterday to the terms "robbery" and "embezzlement" used in criticism of the Gavernment, and the charge that the Government was breaking contracts.The interests of the. country came first, lie said, and if it was necessary to break contracts, then they had to be broken. The interests of the country do transcend the .interests of the individual, but not - the least important factor in maintaining the- interests of the country- is a scrupulous regard ■by the State for the individual rights' and -for the principles of social justice—including the inviolability of contracts. : Who steals my purse steals trash; '- . But he that filches from me my good : • name- .;'.■■" : .Robs me of that which not enriches ■' -And makes me poor indeeti. . • ■■_ Though Shakespeare put the' words' into the mouth of the vile lago they express a great truth. The immediate material gain from disregard of contracts may be many times outweighed by loss of reputation for na; tional probity and by slackening of business morality.' . It is admitted that in such a case as that presented by the'superannuation funds it may be necessary to choose between two evils—insolvency or modification of the contract. Here.it seemsl'impossible to obtain stability by withdraw? ing the extra concessions -which should never have.been granted; but even under the spur of necessity such a,course should not be lightly entered upon, if ariy practicable alternative can be shown. •