INTEREST AND RELIEF

Evening Post, Volume CXV, Issue 47, 25 February 1933, Page 10

INTEREST AND RELIEF

Information was not given to Parliament on the circumstances which made it necessary to rush through with precipitate haste such farreaching legislation as the.Mortgagors and Tenants Relief Amendment Bill, It was stated that the legislation was required to forestall action on March 1, but it was not explained why the powers contained in the Mortgagors Relief Act were insufficient It is dangerous in principle to make laws for special cases, especially when the circumstances are not fully disclosed. The Bill passed yesterday is dangerous for another reason—it adds to the confusion and uncertainty of the present position by its retrospective operation in rendering void contracts and even orders made after the passing of the original Act. The mortgagor who has agreed not to avail himself of the protection of the original' Act is enabled to go back on that contract, and the mortgagee who has secured the authority of the Court to exercise his powers under a mortgage, but has not exercised them, is deprived of the benefit of that order. However these provisions may operate for the relief of j individual cases, the effect upon

mortgagors at large must be seriously damaging. Lenders are told that no agreements they can make, no orders they can obtain are conclusively binding. Any such j orders or agreements are liable to be upset by subsequent legislation. Under these conditions who can be expected to lend? If tills 13 not enough members of Parliament are1 clamouring for further discouragement of the lender by direct and general reduction of interest. y Qne member went so far as' to say. that such legislation as the Government was introducing was oiily trifling with the position. If this, cancellation of contracts is trifling what extreme interference would be considered thorough? j Sir Francis Bell, whose knowledge and experience, in most matters must be respected, has stated that the powers now held by adjustment commissions and the Courts are sufficient to keep the farmer on the land if one step further is taken enabling the commissions to divide the surplus between, the farmer, the mortgagee of land, and the mortgagee of stock to give security for advances which may be required from the mortgagee of stock. The Government's legislation does not take this further step.' It just sets at naught existing Contracts, and now there is the danger that the Government will make matters still worse by further interference with interest charges for all securities other than mortgages. It seems almost useless to remind members of Parliament that holders of securities have already been compelled to make sacrifices in reductions of interest, stamp duty, and penal taxation of investment income. There must be some check to the hunting of the prudent and thrifty who invested for security and find now that there is none. But- if Parliament disregards considerations of equity it cannot afford longer to disregard the effect which its successive damaging shocks must have upon the foundations of public and private credit J Where confidence is utterly desiroyed credit will perish with.it.