NO LONGER GILT-EDGED
FARM LAND AS SECURITIES. LENDING CONCERNS HARD HIT. “Early in 1927 and throughout the past year one mortgagor after another informed the board that owing to the low prices of produce, adverse climatic conditions, and other causes he could no longer carry on. Most ot these mortgagors expressed a desire to walk off the land and abandon everything in favour of the mortgagee. By making substantial concessions in principal and interest we have persuaded nearly 'all of our debtors to remain on the land in the hope that the tide would turn in their favour sooner or later.” These remarks were made by Sir Harold Beauchamp, chairman of directors of the Equitable Building and Investment Company, at a meeting o< shareholders of that institution at Wellington. “1 have to deal with a matter which has occasioned your directors the gravest concern during the past 12 months,” he said. “1 refer to the unfortunate position in which this and so many other lending institutions in the Dominion find themselves with regard to mortgage advances on broad acres. In pre-war days there was no security held iu such high esteem as farm lands, which were valued for mortgage purposes by men who were considered as nighly competent valuers. Borrowers had no difficulty whatever in obtaining advances to the extent ot 50 per cent, to 00 per ceut. of such valuation. When I addressed you last year neithei my colleagues nor myself had any reason to think that we would have to nice heavy losses in respect to any such advances, all of which had been on our books for many years. In fact, up till December 31. 1926, Mio interest on the majority had been paid with commendable regularity and punctuality. The prompt payment of interest in tile past naturally lulled us into a sense of false security, and other lenders were in similar circumstances. In the meantime, lbe board has considered it prudent to transfer to the contingent securities depreciation account from the general reserve fund the sum of £2lt,<Klo to meet any losses that may occur on the ultimate realisation of mortgages that may conic under the gategory of ‘bad and doubtful.’ I apprehend that there will be no difficulty in paying the same dividend in future as that which we are recommending to-day —namely, 10 per cent, per annum. 1 would add that we have since discontinued making advances to farmers. and are now confining our operatime to loans on properties in Wellington and suburbs, and so far as possible providing that a portion <>l the money advanced shall bo repayable under fable.”
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Bibliographic details
Hawke's Bay Tribune, Volume XVIII, Issue 47, 7 February 1928, Page 7
Word Count
437NO LONGER GILT-EDGED Hawke's Bay Tribune, Volume XVIII, Issue 47, 7 February 1928, Page 7
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