FARMERS’ CREDIT

Hawera Star, Volume LIV, 27 February 1935, Page 5

FARMERS’ CREDIT

NEW CANADIAN SYSTEM ESSENTIAL FEATURES OF ACT •COMPROMISE AND RE-ARRANGE-MENT.

The Fanners’ Creditors Arrangement -Set, passed at the last session of Parliament, has been in force in the Province of Ontario sinee the first of October. It ivas drafted for the specific purpose of dealing with the financial problems of debt-burdened farmers. A small pamphlet has been published by the authority of Hon. E. N. Rhodes, Minister of Finance, Ottawa, explaining in simple and concise terms the essential features of the Act.

The legislation as passed seeks to make available in the simplest possible manner machinery whereby (a) compromises or re-arrangements may he effected of the debts of those farmers who are unable to pay but whose statement's of affairs and general desire indicate hope of success; and (b) an assignment may be made at little expense to the farmer in those cases where his liabilities are out of all proportion to his assets and where, in order to enable the debtor to make a fresh start, the only reasonable recourse is to provide a bankruptcy discharge.

STEPS INVOLVED. This machinery, which is designed to make the process of compromise and re-arrangement as simple and inexpensive, as possible, is of two types: (a) local machinery, readily accessible to ally farmer for the purpose of negotiating individual compromises or rearrangements; and (b) central machinery ‘in every province for the purpose of appeal and review. An Official Receiver lias neon appointed in each judicial district. His name and address may be obtained from the county court clerks in the respective districts. To this Dominion officer the farmer debtor seeking relief may go with a full statement of his assets and of his liabilities classed in such a way as to show the amount and character of each type of obligation. The Official Receiver will assist him in preparing his statement of affairs and in formulating a proposal to be made to his creditors. It will be of great; assistance to all concerned and particularly to farmers themselves, if every farmer who intends making a proposal comes to the Official Receiver for his first. interview with the fullest possible information on the following points; (1) Assets, nature and value, income derived from his farm under present and normal conditions, etc; (2) Liabilities, amounts, names and addresses of creditors, with details as to any special liens; (3) Proposal to be made to creditors to which the farmer has already given careful consideration.

INTERESTING SECTION. There is an interesting section in the Act which is new in the law of Canada. It provides that whenever any rate ol interest exceeding seven per cent, is stipulated for in any mortgage of farm

real estate, if any person liable to pay

the mortgage tenders or pays to the - person entitled to receive the money the amount owing on such mortgage and interest to the time of payment, together with three months’ inrther interest in lieu of notice, no interest shall after the expiry of the three months’ period aforesaid be chargeable, payable or recoverable in respect of the said mortgage at any rate in excess of five per cent, per annum. This provision applies to any mortgage hereto fore or hereafter made and whether or not the principal sum is due and owing at the time the payment is made. The purpose of this provision is to release farmers from mortgages on which high rates of interest are being paid in order that they may take advantage of credit which under present- conditions might he available at lower cost either through the Canadian-Farm Loan Boar-tf or otherwise. In this province assistance from the Farm Loan Board is not vet available because the Ontario Legislature has not yet passed the necessary complementary legislation.'

The Farmers’ Creditors Arrangement legislation was passed by Parliament for the purpose of meeting -the special conditions of a temporary period in which many farmers find their obligations beyond their capacity to pay. Its aim has been to set up machinery to solve these difficulties without the expense and complicated procedure of ordinary court processes. “The success desired for this legislation by Parliament can only be obtained if all parties concerned get together with a leal spirit of compromise and co-operation,” concludes the pamphlet.