THE MORATORIUM

Hawera Star, Volume XLVIII, 13 August 1924, Page 5

THE MORATORIUM

MR. MASSEY’S BILL. SECOND READING- PASSED. PROVISIONS EXPLAINED. (by telegraph—press association.) WELLINGTON, Aug. 12. The second reading of the Mortgages Final Extension Bill was moved in the House to-night by the Premier (Mr. W. F. Massey). He traced the history of what is commonly called the “moratorium” and its various amendments since its inception, until now the position had been reached when the moratorium as it stood to-day would expire on Deember 31, 1924, and the question /had arisen as to what- was the best thing to do for the future. ' There was a very general opinion that the moratorium was doing more harm than good, because it was having the effect of making it difficult to get lenders to advance money on land, preferring t-o lend to local bodies, from whom interest was easier to collect. In that way local bodies were coming into competition with farmers. Then there was the cry—the exceedingly foolish cry —that thousands of farmers were walking off their farms. That was not true. He had recently been through three of the largest provinces in New Zealand and he saw no signs of farmers walking off their farms in large numbers. Some had to give in, but the surrender was not general, and it was gross exaggeration to say anything to the contrary. It was no use going about the country crying “stinking fish.” It was better to make the best of the circumstances and tell the people to take their coats off and make a special effort, and they would pull through if we got a succession of seasons such as we had just experienced. Money was cheaper here than in Australia, in support of which statement he quoted a series of Australian quotations.

APPEAL ,TO SUPREME COURT. Under the Bill before the House a mortgagor would have to- go to a judge of the Supreme Court and apply for a continuance of the moratorium in his case, when he would have to show that he had a reasonable chance of recovering hie position within a reasonable time. It was not necessary for him to go through all the clauses., because there was only one principle in the Bill—'Whether there, should be any extension at all. There would be several amendments, one of which would probably be the substitution of March 31, 1925, instead of December 31, 1924, as the date for the expiry of the moratorium, and for this there was a great deal to be said. Mr. Massey said it was impossible to say what amount of money was iuvolved under the moratorium.

•Mr. T. M. Wilford (Leader of the Opposition) said people had been put off with the statement that the Advances Department would meet all the requirtments of the fanners, but the department had failed. It was an excellent department, but it had nothing to feed. it, and so this Bill was brought down to fill the gap. He regarded it as a perfectly silly proposal to lift the moratorium at present, when there was no' money in the country. It- would have the effect of lifting, the rates of interest to those of the bad old days, when anything from 8 to 12 per .cent, was the rule. Wherever lie went throughout the country the cry was, “Do not let the moratorium .be lifted till we can get-a chance to recover.” FURTHER. EXTENSION URGED.

Every big financier Avas in favour of this Bill. It foloAA'od a isuggestion made by the acting-chairman of the Bank of NeAV Zealand, and that Avas where it came from. The Bill Avould simply throAV many farmers to the financial wolves, and there Avould be tragedies we did not Avisli to see. His OAvn suggestion was that the Premier should bring doAvn, not this Bill, but an amendment to the Mortgages Extension Act extending tne moratorium for a further eighteen months, at the same time providing for an amendment of the statute of .limitations, and he moved an amendment to that effect.

The Minister for Lands (the Hon. A. D. McLeod) isaid this was serious legislation, but he was fully satisfied that the moratorium was doing more harm than good, and it should be terminated. It was all nonsense to say that agricultural banks would meet the position, for precisely the difficulties which had faced the Advances Department would also face agricultural banks. What would do good among farmers would be long dated loans. Deference to the banks waiting to jump valuable properties might be all very well as a political statement, but it did not count for much otherwise, because everyone knew that that was not the class of business done by the banks. The proportion of flat mortgages held by the banks was comparatively small. He knew the position was serious, but it would be more serious to continue the moratorium than to terminate it. ST AT K ADV A N OKS. Mr. G. W. Forbes (Hurunui) favoured an extension, of the moratorium for eighteen months. The Advances Department had failed to meet urgent cases, and as the Government had let these people down the moratorium should be extended until such time a& the Government was in a position to meet the farmers' needs. Mr. Massey, speaking to the amendment, said he regretted that an attempt was being made to manufacture party capital out of the farmers necessities. Farm lands were not in favour as security to-day, and if the moratorium were extended the position would be infinitely worse. The Advances Department had been .spoken of with derision, but what were the facts? Since the present Act came into operation there had been over ten thousand applicants and £3,500,009 had been authorised, while .-C7.60K.116 had been paid out. As to the future, he had *cveral millions in sight, but he was not going to put all his money on the market at once and so create a boom. The Advances Department was a wonderful department, and no agricultural bank could do business anything like it. To carry the amendment would be the worst possible thing that could happen. " Mr. H. 10. Holland (Leader of the Labour Party) said the only principle in the Pill was the extension of the moratorium to the mortgagor who could satisfy the Supreme Court that it should be extended. At the same time the Bill made no provision for ra reduction in the 'interest charges which farmers had to pay. Unless sonic such relief was given the Bill would be useless. He would support the amendment. although he recognised its limitations. inasmuch as it did not provide for a reduction of interest any more than the Bill did.

At 1.5 a.m. a division was taken on Mr. WilforcPs amendment, when it was rejected by 33 votes to 25. The Bill was then read a second time and referred to the public accounts committee.