The Northern Advocate Daily WEDNESDAY, AUGUST 14, 1935. MORTGAGE LEGISLATION

Northern Advocate, 14 August 1935, Page 6

The Northern Advocate Daily

WEDNESDAY, AUGUST 14, 1935. MORTGAGE LEGISLATION

Registered for transmission through the post as a Newspaper.

The legislation affecting mortgages passed by the present Parliament is a matter which is very naturally exercising the minds of the public. The Government is to be commended for the steps it has taken, and is still taking, to acquaint the public with the details of the legislation. It has gone much further in this direction than has been the custom in the past. When the legislation was being contemplated, the Finance Minister circulated, tlirough the press, and by means of pamphlets, details of the proposed Acta and the purpose they were designed to achieve. Since the passing of the legislation, he lias issued very full, expositions of the provisions of the Mortgage Corporation Act and the Mortgagors’ Final Adjustment Act. In addition to this, Dr. Belshaw, , the economic adviser of the Finance Minister, is touring the Dominion and explaining the provisions of the Acts. It will not be the fault of the Government if' the mortgage legislation is not understood, so far as such understanding can be assisted by official explanation. It appears, from questions addressed to Professor Bolshaw last evening, when he spoke in Whangareh that some of the provisions affccti-ng the final adjustment of farm mortgages arc not clear to the legal fraternity, which suggests that the layman is in deeper uncertainty, but Dr. Belshaw explained that these are matters which must remain in doubt until the Court of Review, the supreme authority, makes rulings on the points raised. Questions regarding the rate of interest at which the Mortgage Corporation will lend money are i equally incapable of answer un- j til the board of the Corporation! fixes the rate. It is well that 1

those points should bo recognised. for it is upon the rulings of the Court of 'Review (which will no doubt l>e influenced by the principles of equity as well as law), and of the Mortgage Corporation Board, that the policies of the two institutions will be based. So far as the general provisions of the Acts are concerned, they arc straightforward and clear, 'but the Government, as wo have said, is to be commended for thq trouble it is-taking to inform the public. It has been o.byious, from the outset, that the transfer of State mortgages - —those of the State Advances and other departments—-to a Corporation which was to be guaranteed against loss on mortgages that were insecure, would involve the general taxpayer in loss. This aspect of the mortgage legislation is being discussed at the present moment, and much will no doubt be hoard about it between now and the date of the General Election, but, here again, speculation is of little value in the meantime. The extent of the loss will depend upon the policy adopted .by the board of the Mortgage Corporation, which may decide upon the immediate writing down of. insecure mortgages or, in the alternative, create a suspense account and await improvement in world affairs, which, of course, would increase the value of the mortgage securities taken over by the Corporation. It is to be feared that loss to the State is inevitable, and all that can he done is to hope that it will not be so large as some peojjle i anticipate. The loss, however, will not be attributable to the creation of the Mortgage Corporation, but to the fall in the value of mortgage, securities that has already taken place.