VARIABLE CONTRACTS

Evening Post, Volume CXX, Issue 9, 10 July 1935, Page 10

VARIABLE CONTRACTS

(Jo the Editor.) Sir,—ln your footnote to my letter in Monday's "Post," ''Where are we going," you state the following: "One of the principal complaints against the Government is that it has adopted Socialistic methods and disregarded contracts." In view of the very desperate situation which arose in this Dominion, including the unemployment situation and the plight of primary producers, who deflntely proved that it was impossible to go on paying the contracted interest on loans and live, and the impossibility of thousands and thousands of good citizens being unable to meet their interest charges in business and private life, what else was there to do but for the State to step in and grant some protection to mortgagors and decrease the returns of those holding Government scrip at a higher rate of interest than money .was worth during the depression? If a Parliament elected by the people for the people is not justified in bringing in protection, necessary in a severe crisis, for, the majority of the people, what is it there for?—l am, etc., , EQUITY. [As "The Post" has many times pointed out, it* was never definitely proved that all who received the benefit of interest reduction were unable to pay in full. Machinery already existed for investigating cases and granting relief where it was justified. Under the fiat reduction many borrowers received relief at the expense of lenders whose hardship was greater. In Government loans the terms are that the lender agrees to accept, a fixed rate of interest. Many holders of Government stock were losers by this contract when rates of interest were rising in the boom period, but Parliament did not vary the contract in fairness to them. If contracts are variable at will by legislation there can be no firm basis for agreements.—Ed.]