THE MORATORIUM.

Manawatu Times, Volume XLVI, Issue 2003, 20 December 1921, Page 5

THE MORATORIUM.

AN EXTENSION BILL. INTERESTING DISCUSSION. (Per Press Association.) WELLINGTON, Last Night. On the motion to go into committee on the Mortgages and Deposits Extension Bill, the Hon. E. P. Lee said the whole position of mortgages and deposits had been carefully considered by the Statutes Revision Committee, and as a result of enquiry, December 31st, 1924, had been fixed for the termination of the moratorium. This did not affect any mortgages executed after the coming into operation of the Act of 1919. It was intended that this was to be the last Bill of the kind the House would be asked to pass, as It was hoped the financial conditions would have settled by the end of 1924. The second part of the Bill dealt with deposits on call. The most important provision was that in cases of companies taking further monies on deposit or issues of debentures, they must utilise that new money to pay off the money already placed on deposit. Any evasion of this provision would make an offender liable to a fine of £IOO. The date to which the expiry of existing deposits was extended was July and October, 1922. The Bill had been carefully considered by the legal and commercial world, and he thought it would meet all the requirements. Mr T. M. Wilford said that as this Bill was introduced into the House, It was the most crude and ill-digested measure ever presented to Parliament, and he severely criticised the Government for asking Parliament to consider such a Bill. He would support the Bill as it had been revised by the Statutes Revision Committee, because it greatly simplified the position, and removed many of the absurdities contained in the original measure.

.Mr G. Witty asked what would be the position it’ a man who sold his property and incurred fresh liabilities, contingent on money expected from the sale of his first property, then again, at the end of three years, a series of mortgages would become due sirmiltancously, which would lead to chaos. The mortgages ought to be made redeemable in succession as they became due. It was wrong to keep money tied up, as it would be under the Bill. Men should at least be able to get a higher rate of interest for money so tied up. Dr. Newman agreed with Mr Witty. He asked if the Minister could not agree to make mortgages repayable in rotation, as they fell due. He urged that it should be made plain that at the expiry of the term of this Bill there would be no further moratorium, so that people would begin at once to make provision for paying off mortgages. The Hon. J. A. Hanan concurred in the opinions expressed that the Government should give a definite undertaking that this would be the last Bill of the kind. If this was done, it would restore confidence in the country. An artificial protection in the nature of a moratorium, if continued indefinitely, would only lead to perplexity and trouble. The Hon. C. J. Parr said that though the war had ended, the financial conditions were, in many cases, even more difficult than in war time. Mortgages totalling fourteen or fifteen millions were falling due on December 31st and legislation was urgently necessary to avert the trouble that must accrue. The term fixed by the Committee (three years) for the extension of the moratorium was definite and final. Mr D. Jones, referring to building societies, said these had money, and they should be made to disgorge. They had nothing to complain of under the Bill. No company should pay dividends to its shareholders until it had satisfied the calls of depositors. He considered that the extension of time for the repayments to July would make it difficult for many farmers to pay the land tax. Mr A. Harris urged that depositors should be put in the position of preference creditors, and should receive interest at the rate of 1 per cent, above the current bank rate. Mr R. W. Smith believed the Government’s proposals in the Bill provided the only means that would enable many people to pull through critical times. Mr Savage considered much of the present financial trouble had arisen through private companies having been allowed to assume the function of banks to too great an extent in financing the various enterprises in recent years. The Hon. E. P. Dee replied, the Bill was read a second time, and the House went into Committee.