ORDER OF PAYMENT

Evening Post, Volume CXVI, Issue 144, 15 December 1933, Page 8

ORDER OF PAYMENT

The principal new proposal in the Mortgagors and Tenants Relief Bill is that authority shall be given to include the stock mortgagee in any pooling arrangement. This has been advised by authorities who have recognised that the absence of this power may hinder the completion of equitable pooling arrangements, and may even leave the land mortgagee with no alternative but to take possession of the farm. Though we believe the majority of stock mortgagees have proved fair and reasonable it is, unfortunately, necessary to frame the legislation to check an unreasonable minority. Parliament will, we believe, accept the need for some provision of this kind, and the only question is whether the proposal, and especially the suggested order of pay-

meats, is the best that can be devised. We are not convinced that it is. Certainly current advances and interest thereon should be paid first; but in the disbursement of the balance the stock mortgagee's claim to precedence for interest on past advances is not proved. In the South Australian plan the order of payments is as follows: — ll Current advances for living expenses, stock, or farm commodities (corresponding to the stock mortgagee's No. 2 account). 2. Hanking equally (a) One year's interest on land mortgage; (b) One year's interest on stock mortgage or bill of sale; (c) One year's rent of fanning land;' (d) One annual instalment ou any farm machinery; (c) One year's rates and taxes; (f) Medical expenses, 3. Seasonable sustenance for following year. 4. Eemaining debts other than principal moneys secured by mortgage, bill of sale, stock mortgage, etc. 5. Surplus, if any, to be returned to the farmer. The Government's proposal differs from this in that priority is given to the stock mortgagee and after that to rates and taxes. The land mortgagee comes well down the list. We cannot see that the arguments used in favour of this order are convincing. If the stock mortgagee sold up the stock the farmer would certainly have to stopk again, but he would have to buy or lease again if the land mortgagee foreclosed. The contention that the land mortgage security is "practically indestructible" also needs qualification. The value of the security depends much upon the way the land and improvements are kept.