MORTGAGE CORPORATION

Northern Advocate, 25 October 1935, Page 9

MORTGAGE CORPORATION

CROWN INCURS RISK CAUTION ADVISED SAFEGUARDING THE TAXPAYER. IFrom Our Parliamentary Special .] WELLINGTON, This Day. In the House of Representatives yesterday the Leader of the Opposition, Mr M. J. Savage, criticised the action of the Government in setting up the Mortgage Corporation to fulfil a service that he thought could well have been conducted by the State lending departments. Referring to the amendment, Mr Savage said: “All this tangled skein comes about as the result of trying to turn the State lending departments into a semi-private institution. I suppose most of the amendments are necessary, Out what is there in a Mortgage Corporatipn Act that could not have been carried out by the State Advances Department?

“It appears that whatever the liabilities are they belong to the Crown, and whatever assets there are will belong to the Mortgage Corporation.” 1 Mr Savage said that no liabilities that were there when the State Advances Department was operating had been removed. If any amendment was necessary it could have , been brought about by revision of the State Advances system. Downie Stewart’s Warning Another one who commented on the Bill was the/Hon. W. Downie Stewart (Government—Dunedin West). He said, he thought he should warn Mr Coates, the Minister of Finance, to be on his guard at all times, against the •grave danger of the Mortgage Corporation building up a system of law for itself. This had been done by the Public Trustee until the Courts found that; when matters concerning the Public Trustee were being considered the ordinary law has to be put aside.

The Minister of Finance was natur - ally expected to see that the Mortgage Corporation had the power to make an effective realisation of its securities, bub the Minister also acted for the taxpayer, who, naturally, wanted to see the best possible results obtained. The Corporation had all the powers, but none of the risks. There must be some stage where the risk passed from the Crown to the Corporation, but it appeared from the Bill that whatever the Corporation did, even if it made a mess of the business, the risk was still with the Crown. 1 " An Important Point. Continuing, Mr Stewart said that the Bill gave the Corporation power to extend a mortgage even if the mortgagor wished to pay it off. He thought any action of that kind to be only witn the consent of the mortgagor. Mr Coates said that Mr Downie Stewart had raised an important point, and he would keep it in mind. In order to reach smooth working and adjustment as between the State Advances Department and the Mortgage Corporation, most of the amendments were essential. ' So far as the payment of rates was concerned there was a “little gleam of hope” coming. Members of the Labour Party:— “When?”

Mr Coates replied that the gleam of hope was coming in the Finaifce Bill.