MORTGAGOR AND MORTGAGEE

Hawera Star, Volume L, 6 March 1931, Page 5

MORTGAGOR AND MORTGAGEE

SUGGESTED ADJUSTMENT BOARDS* FARMERS’ UNION SUPPORT. The question of 0. scheme to deal with, the difficulties m regard to mortgages as oetween the vendor and the purchaser oi land or with mortgagees nas been occupying the attention of the iNew Zealand Farmers’ Union tor some time, it was the subject oi oonsideraole discussion by* tne South Taranaki executive at the last, and yesteruays meetings at Hawera, and was also tulfy discussed by the Eltham branch oome weeffs ago when resolutions were pusseu urging that a re-adjustment oi mortgages and rents was essential anu tnat tne Government snould set up ooards t.O consider mortgages and introduce legislation to give effect to then recommendations, ciealing with mor.tgages (a; that will bear interest, on average prices, (b) that wiff not bear interest when prices and conditions are at an average revel. After considerable discussiop. it was agreed to withdraw these and to substitute a resolution, slightly amendeu submitted by the Dominion executive: “That in order 'to afford opportunities for relief in cases of hardship, rm*ai nuance adjustment boards should bei set up in each land district to .whom xarmers experiencing difficulty with their mortgages might appeal; isucn boards to hear, the evidence of both parties and make recommendations, and in the event of such recommendations. not being accepted, the boaru have the power to submit the mattei to some judical authority to be set up by the Government for the purpose.” This resolution was forwarded to the Prime Alinister for his consideration before lie finally announced his policy regarding mortgage adjustment. All*, j. Cocker reported that the local committee had met and several cases o? extreme hardship had heen reviewed and discussed. In one case a man bought some years ago 78 acres at £l2O, a total of £9360, paying £SOOO down and later £IOOO. He had farmed it well and had built a new cowshed that would be a credit to anyone and the improvements generally had cost him £IOOO. He had raised -the hutterlat return from 10,0001bs to 17,0001b5, and had on the place 60 cows, 10 calves, four horses and 30 sheep, and he could do well at one shilling per lb for fat. The committee was powerless to do anything and! had no power except as mediators. He added that in his opinion there was no place where district adjustment boards were needed as in South. Taranaki. And there must be legislative powers, if anything was to be achieved.

He added that, there was great need and he knew of six cases in the Eltham district who were pushed and did not know what to do, and all had. farmed well and increased production. The Government should have power to enforce assessments. It was perhaps somewhat revolutionary, but there was much, hardship that might be avoided. “A farmer’s land is his bank and he puts everything into it and then finds it all gone, the labour of years.” He would be better off if he bad taken it out and not worried about improving the place. Mr. W. E. Carter supported Mr. Cooker and instanced the cases of men who had sold their farms and .bought another place. Land, he said, if neglecfted, quickly went hack. Mr. Cocker said that the whole circle “would have to be adjusted. There should, he said, be not much trouble in the case of a man selling and retiring, but the other eases certainly were more difficult. Mr. E. K. Cameron referred to the extracts received from the Dominion executive and said that it was agreed the renewals did not present special difficulty, but it was the meeting of current obligations that caused trouble. He considered that if anything was done to interfere with the rights of mortgagees and mortgagor, it would tend to destroy confidence in rural tseaurity if Parliament was gonig to interfere as soon as trouble came. That was the opinion of the Economic Commission. It was agreed that in many cases of land sold at high figures, the value was never in the land and at any time the land was not worth more than about £6O at the outside.

He said that in the February issue of the New Zealand “Financial Times” the following paragraph relating to State intervention occurred: “It would he a blunder of the first magnitude to let the Government mix up in what is after all a private contract between mortgagor and mortgagee, both having entered into the contract with their eyes open. The mortgagor has. had the advice and help of the mortgage-pro-curator, and the mortgagee has had the advice of the land valuer. If the mortgagee has been fool enough to succumb to the optimism of the land valuer, and lend more than the land was worth, he should be made to pay for his mistake. The mortgagor and mortgagee are .best left to themselves to settle difficulties. Some few mortgagees may be harsb, but the majority will be glad to forego interest to save the principal. A good deal has already been done in that respect. This is very much of an economic problem, and the intervention of the Government would be to inject politics into the problem, and the two will not mix. Farmers are always calling out for cheap money, and the cry has been heard for the past forty or fifty years. At one period of our history we had a number of land companies operating here.. There were more or less trust companies, and their method of operation was to obtain deposits in Britain, and! lend the money to farmers and others in New Zealand. In this way a great deal of foreign private capital was introduced into the country.” He also read an extract from a. letter from the Prime Minister regarding adjustment of .mortgages: “I have pleasure in advising you that, as recently publicly announced the Government has decided to appoint the various Commissioners of Crown Lands as adjustment commissioners for the purpse of considering the financial position in connection with any farm which may bo referred to them, and to en-

able the parties concerned ho arrive at an equitable setlement. In addition it is proposed to introduce this session legislation setting up a special judical body to which disputes in special cases may be referred. These measures the object of which is to prevent any exploitation in connection with the present financial position, while* not quite'in accordance _ with the resolution passed by the Dominion executive, will no doubt achieve the same results./ Mr. E. J. Betts said that if capital was scared off, the position would be worse than ever. . Mr. L. A. Jennings said they must get the land on a sound footing and £6O per acre was the extreme value m normal times. There were large numbers of men in the same position and something had to be done; otherwise men would be forced off the land and be idle. It was a sound proposition to set up a commission and it would be a crying shame if many of the best of the farmers were pushed off the land when in some cases the mortgagee got' twice the value there was on the land. Mr. Cocker remarked that- a judicial committee with legislative power® -was needed who would be able to effect an all-round adjustment, treating everyone in the fairest way possible. There waslie added, a whole circle affected. There, were too many good farmers affected and production would go down tremendously if thev were forced to give up the land. He considered! it had become a national question. Mr. Carter added that it was certain the extreme prices were never justified. “If there is a board set up with power to enforce its decisions', that is all that is wanted.” Mr. A. C. Johnson said that the idea of the committee was to stop men being driven off the land. Many mortgages were arranged on fictitious values. On the motion of Mr. A. Hodge it was also agreed that, in view of the value of the Commissioner of Crown Lands to the rural finance adjustment boards, the Government be asked to give them authority to accept a seat on the board.