RIGHTS OF INVESTORS

Evening Post, Issue 36, 12 February 1935, Page 8

RIGHTS OF INVESTORS

m I The president of the Farmers' Union has found it necessary;, in iTaTanaki to contradict a report that the farmers were 100 per cent, behind the Government's Mortgage Cor« poration proposals. There has evidently been some erf or in the transmission of the report, for Mr. I Poison's statement in Wellington iwas that the farmers were 100.per cent, for co-operation. The farmers i also demanded that the rates of interest should be lower, and that, if co-operative control of the Corporation could not be arranged, the alternative should be State control. Cooperative control has not been defined, but presumably it means something different from the association of State'and shareholder control proposed in" Mr. Coates's pamphlet. It may mean that mortgagors should be given power (with a State guarantee behind them) to take control of all mortgages, including those held by Government lending departments. But we can scarcely believe that Mr. Poison would go this far. It is necessary, however, that those who are watching the interests of investors should be ready to meet and resist such a demand, for Mr. Poison made it quite clear in Wellington that he has not much respect for opposition. • There had been much criticism over the raising of the exchange rate, he said,.but that had now practically died away. There had also been criticism over mortgagors relief legislation, but chambers, o£ commerce were now anxious to have the mortgagors relief legislation extended. The Minister would no doubt tread, on thousands of corns with the proposed legislation, but he believed .that the criticism would die. away and the benefits would be realised later ; on. There are two" grave misstatements in this. •■ Criticism of the high' exchange'has not died away. Only last session we heard the Government complaining because it had not and blaming opponents of the high rate >f or not meekly accepting what the Government" had forced upon them. Certainly opponents have realised that the Government is not qpen.to reason, and a more convenient season must be' awaited before it can be .persuaded to reconsider the position; '.but', this does not mean that the • high rate is accepted. The ~ second - serious 'misstatement is that,. ihe chambers of commerce are now 'anxious for the mortgagors relief legislation to be extended,..". Admittedly an extension has been suggested, but as an alternative to the Government's - farmers rehabilitation plans. The chambers of commerce have submitled that private adjustment is preferable to the compulsion proposed by the Government and .that an extension of the protection term would permit this equitable settlement. This is wholly different from accepting the mortgagors relief legislation as desirable in. principle. It is not desirable, but it is less ob-

jectionable than some-of the measures proposed in substitution for it. The New Zealand "Accountants' Journal" points out that "the scheme aims to continue the principle of compulsorily adjusting private obligations." If the proposals are given effect to there is a distinct possibility that some of the liabilities of the individual will be transferred to the shoulders of the community. . Having started on the policy of Government interference with contracts it is now difficult to withdraw and what the business community anfl, incidentally, Parliament should consider is whether the plan as outlined by Mr. Coates will not further extend and perpetuate a. measure of State control rather than pave the way for the return of normal mortgage finance. We have no.doubt that the measure as originally proposed can have no other effect than extension and perpetuation, of State control. Possibly this is not the deliberate intention of, ihe Government, for the Coalition was not returned to introduce so farreaching a measure bf State Social-1 ism. The Labour Party was returned with such a policy, but the | Coalition has,just drifted from one measure to another. Even now it does not appear to perceive that it is saving the Labour Party a lot of trouble by thus preparing the way for extensive State control. Once the bulk of the mortgage finance of the country is under one control it would be comparatively simple for a future Government to direct the mortgaged estates.' Even collectivisation of farming would be easier. Because the Government is blind to the ultimate effects of its interference, it is more than ever necessary that those who do not desire" rash experiments should state their objections with" [ force and frankness. It is reported now that some modifications have been made in the original plan. This is encouraging to those who have [ given time and thought to make the public aware of the dangers; but we have no assurance that the most dangerous features have been eliminated from the scheme and vigilance cannot yet be relaxed.