MORTGAGE PROBLEM

Manawatu Standard, Volume LV, Issue 65, 13 February 1935, Page 8

MORTGAGE PROBLEM

INTER ESTS INTER LOCKED. LENDER AND BORROWER, It was only to be expected that the public statement on the mortgage fin- ; .nice proposals of .the Government, - i made by the commercial and financial [committee set up under the auspices of | the Associated Chambers of Commerce i of New Zealand, would be subjected to | criticism, as well as approval (says a ’j.statement by the Associated Chambers). I Full public discussion of the whole subject is nevertheless highly to lie desired in order that the best may be done to deal with the very important probI lem of rural finance. I It is a poor criticism, however, that j the various bodies concerned in maki mg the statement are more or less interested parties, whoso views are tliere- ) fore to be considered with some reseri ration. Of course, these bodies are to some extent interested. It seems that whoever expresses an opinion on a matter of public importance at once places himself in an inescapable situation. If a person or an organisation having no interest in. or experience of, matters involved in some public question expresses opinions, then those opinions are at once discounted because “they know nothing about the subject,” If they have the benefit of day to day experience, their views are again open to be discounted, because “they are interested parties.” SMALL SUMS MADE LARGE. Since the appearance of the recently published statement, a view which has gained a certain amount of support is that “the big, moneyed interests are attacking the proposals of Mr Coates.” It is criticism of this .kind, winch has its root in prejudice and not m knowledge, which carries conviction for many people. The fact is that the life assurance societies, for instance, which are the largest private lenders on mortgage in the country, hold a great proportion of their funds on behalf of people of small means —funds made large through the aggregation of relatively small sums. According to tiie 1935 Year Rook, the total of policies held bv life assurance societies (including the Government Life Office) is 011,000, and their mortgage investments amount to £ll,310,000. The friendly societies have a membership of 100.000, and their investments on mortgage amount to £3,400,000. Building societies have a membership of 49.000, and their advances on mortgage amount to £8.000,000. The funds of the investment companies are largely held on account of women. Institutions such as these were fully represented on the committee responsible 1 for the recent public (statement on the ' proposals of the Government. These figures illustrate how advances on mortgage result from aggregations : of small savings. The “hard-fisted” i mortgagee -or the “grasping” lender < generally turns out to be an aggregation of people of small means who I have a right to justice the same as 1 those who make use of their money. It 1 is people such as these who are in i danger of being unjustly dealt with 1 as a class under the proposals for the 1 rehabilitation of farmers’ finance, i through having to bear the cost of re- * habilitating the farming industry ’ while other classes of the community « are not called on to share that cost. ' JUSTICE TO ALL. (

It is not a case of one class against another. The organisations responsible for the recent statement know Iho position of the farmer as well as the Government docs. They have approached the mortgage finance proposals of the Government with an open mind, and have criticised those proposals frankly, making their comments and their alternative suggestions with every regard to the whole situation, and seeking to ensure that justice shall be done to all concerned, and injustice to none.

Jn discussion and consideration of tlie present difficulties for the farming industry, what is most to be deplored and avoided is the assumption, or development, of any difference between town and country. The interests of the two are too interwoven in tile general welfare for any divergent paths to be followed. It is by no means a case of the farmers against the rest, as there are farmers who are opposed to the method as proposed by the Government for dealing with farmers’ rehabilitation. The committee is fully alive to the necessity of solving the problem of rural finance, and was only ioo willing to co operate in an endeavour to find such a solution.

It is the important task of Parliament to deal fairly with all classes, eschewing any action which would tend to destroy the credit of all farmers, and damage their reputation as borrowers. Whatever legislation is passed, the farming industries will still go on, and so long as they go on they will need financing.