THE MORATORIUM

Nelson Evening Mail, Volume XLVIII, Issue XLVIII, 12 May 1915, Page 4

THE MORATORIUM

INSTANCES OP ITS_ ABUSE. NEED FOR CAUTION IN AMENDING THE LAW. '■-.,- . That Mr Herdman's announcement as to the' probable announcement of. * wo Mortgages Extension Actf affected widespread interests is illustrated, by "the variety of opinions that are expressed with."regard' to' , practical r steps' "*'that should be taken to/redress 'jthe ",g"oV--ances, of "lenders- .'who conside^'.that. boti jow.e'rs are dishonestly hiding beoind ;tho Act and investing'money aIJ a 'romwiera 1 tive rate of interest, One.case-thatjhas been brought to the notice t <Si,H> ",&ss*> representative is ."that in which an. Auckland lender'is said to ha-vje beeri'.phicea in'a moat unfortunate position'.qw;n,g to the ' Act/ Havingi Sorrowed; tfbjn.'tho bank at 6 per cent., on tlje .of » mortgage for several falunjj a "few months, the. mortgagee 1 i» due course applied for payment of'the principal lent on the mortgage, and -was told that under "the provisions of the • moratorium. 1 the borrower had decided not to repay, and had, reinvested the money which he had j borrowed at 4£ per 'cent, at'B per cent., < while his own money was only bringing in thus making a gift of. li per cent, to the.defaulting mortgagor. In an interview, Mr. Robert Burns, president of the Auckland Chamber of Commerce, expressed the optnibn that the Act should be altered so that'instead of a person who had lent, having to prove that the borrower was in* ofijbsitiori to pay, and had deliberaiely Jnaglected to do so, the onus of proof that j ho could not redeem the mortgage owing to the war would. rest upon the •. defaulter. The Act, as it existed at present, was distinctly unfair. Mortgages on which money was lent at 4£ or 5 ,'jp.or cent, fell due, and though .the money was worth much larger interest "than that, the borrowers who could afford pay up refused to do'so in order tojihvest at a higher rate of interest.- Withdrawal or modification'of the'AcV, bound' to -press hardly upon a groat many people, tout suitable provision could bo made to cover certain case's. A Government official might be appointed in each important centre to act as arbitrator between the borrower and* the lender, and decide each case •on its merit's. . ' Mr. Myers, M.P.," ex ; Minister for Finance, while agreeing that it was deI sirable to "deal with the defaulting \roinvestor, took the view that grVatf ■ daution must be exercised in amending *'tho Act. -He considered that the 'Act; was undoubtedly justified on,the of hostilities. In the light of,'experience it was apparent that tgere were a ,number of people who probably were seeking the protection of the Act;under'unjustifiable circumstances,' but, having regard to", the continuance of the war, he 'did not think it was desirable to repeal the Act/ "There was no/doubt! that' ! come amendment was desirable,' ' but he thought that the Government should exercise great caution in altering the Act.