THE MORATORIUM.

Hawera Star, Volume XLVIII, 20 June 1924, Page 6

THE MORATORIUM.

BANKER'S COMMENTS}. In tlio course of his address to the annual meeting of the proprietors of the Bank of New Zealand, the acting chairman of directors (Air. William Watson) referred as follows to the moratorium: — iTlre moratorium on mortgages will expiry at the end of this year, and the public mind is exercised as to whether there will he any extension of it or not. The Act has been in force for ten years—some of those years the most prosperous the Dominion has ever experienced—therefore', logically, mortgagors who have been sheltering under its provision should now be left to face their positions. New* Zealand is the only country in the British Empire, if I not in the world, in which a moratorium of mortgages has been renewed from time to time for such a long period, so that it cannot be said that j mortgagors have not received a maximum of consideration. The artificially high range of land values, largely the result of the moratorium, prevents investment by many possessing the capital and energy to further increase production. Many Lenders on mortgage have lost heavily from depreciation in values of their securities; others have narrowly escaped loss after a period ! of great anxiety, besides being so long j deprived of their capital for other uses. These conditions have caused lenders to look askance on mortgages as means of investment except when large margins of security and high rates of interest are offered. It is in the best interest of the country that the mortgage on broad acres should again become a favourite form"of investment, but it will not, if there is reason to fear that the contract between ■ lender and borrower may he set aside by legislative interference with scant eonsidera, ? tioii for the lender. The Advances to ! Settlers Department of the Government ; lias lent some 21 millions on farm lands I during the twelve months ended 31st , March. Much of this amount has no l doubt been applied in clearance of : mortgages affected by the moratorium, but a considerable, sum must have been : obtained sim ply because Ibe Doparl - : incur. eln-rge; a lower rate than oilier l leaders. While on the one hand 'it is | known that. some mortgagors have Hi taken ad milage of the law to retain i| m hoy for other purposes than rasing a: o ; their overd’m mo.tgages, it is in~ | eviinbie that a number will have to sur. s' render their properties, and there is k but little reason for the majority of | them to hope that extra time would do more than postpone the evil day. It may be sai'olv as-wtod that, except, in ji very few oasm the muses of failure C; ;i ; • use f • purcl:n ir.g; ]and at infinied | prior s. ;n pcii iny more land than purchasers* capital warranted, and incompetent farming. For such it would certainly be against Ihe interests of the country that further extension should take place. D mav be, however, that a very few cases merit consideration. and three might well bo referred to the Supreme Court as is now done in some cases of aisom's of interest, the court to dorado as in an etiuitahle arrangement beta eon the parties ac- _ cording In 1 lie snot-inl oircuiiixtanees.