Nelson Evening Mail MONDAY, FEBRUARY 18, 1935 NATIONAL AND NON-PARTY

Nelson Evening Mail, Volume LXVI, 18 February 1935, Page 4

Nelson Evening Mail MONDAY, FEBRUARY 18, 1935 NATIONAL AND NON-PARTY

IT is not surprising that the proposals of the Government contained in the measure now before the special session of Parliament to establish a National Alortgage Corporation should have received more attention in and out of legislative circles than has been concentrated upon any Bill indecent years. The proposals, designed to reorganise mortgage finance, and leading more particularly to the rehabilitation of farmers’ finance—which is to be the subject of a separate Billare very wide-reaching in their effect. That something of the kind was necessary was generally admitted, but there has been strong criticism of more interference in private contracts, and grave doubt has been expressed as to the wisdom of the State embarking further upon the seas of what has been described as “State Socialism,” instead of providing greater facilities for private enterprise to grapple with the problem. That criticism has not come from the Socialist Opposition, whose leader (Air Savage; has protested against the Corporation being other than State-controlled, and has advocated the “creation” of money, fn other words, lie seeks power to revert to the printing press to produce paper money—a course Germany, for instance, reverted to with disastrous results. It is significant that another opponent of shareholder-control of the proposed Corporation was the President of the New Zealand Farmers’ Union (All* W. J. Poison). He expressed the hope that “others will show that they are here to do their best for the country, and not to give allegiance to a party without any considerations other than that of allegiance.” Asked by the Alinister of Finance (the Rt. Hon. J. G. Coates) whether he was opposing the Bill, Air Poison replied that he was expressing an opinion as the trustee of the farming community; he resented any suggestion of a threat, he would not oppose the second reading of the Bill, but he waß going to oppose many clauses, and in Committee would vote as lie thought necessary and right for such amendments as he thought desirable. Despite the question of the tirno available before the opening of Parliament it is doubtful whether the Alinister of Finance was wise in declining to have a further round-table conference, as suggested, with the Committee representing commerce and financial interests. It would not have mattered much had the opening of the adjourned session of Parliament been deferred for a week or more. This Committee after meeting the Minister had presented a statement, together with alternative proposals, which called for serious consideration. It is not suggested that the many representations made to the Alinister were ignored. Air Coates indicated that he was still prepared to accept amendments based on constructive criticism. Moreover, he amended his original proposals. Originally it was proposed that the Corporation’s share capital of one million pounds should be raised from the public. The Government’s Bill, however, makes provision for half of this total being provided by the State, the other half by the public. This necessarily involves more State, and State predominating control and responsibility, and is one cf tho major controversial points. In another direction the Alinister has responded to criticism. His original proposals provided that tile aggregate of outstanding bonds and stock should bo restricted to twenty times the amount of capital and reserves. The Bill places this limit at fifteen rimes, reducing the maximum bond issue from about £80,000,000 to twenty millions loss. As State mortgages to be absorbed amount to some

£50,000,000, there is not a great margin left for private mortgagees. The State departments’ mortgages would appear to be deriving the. greatest benefit. And then it was proposed to make loans on first mortgages up to 70 per cent, of the value of security. This has now been reduced to 66 2-3 per cent., which will be regarded as quite high enough for safety even in view of the reduced valuations which appear to be inevitable in the changed conditions. These changes should make the Government’s proposals more sound financially. Aiany other considerations are involved. It is to be feared that there is often more sympathy felt for the borrower than for the lender, whereas there should be fair and equitable treatment for both, and any loss involved should be spread over the whole community. Often the lender is a citizen who has saved carefully and has seen fit—under conditions hitherto observed where private contracts were honoured and protected by the law —to invest his savings in mortgage investment. Or it may be, he is represented in a small way by a big organisation which invests on bis and others’ behalf. Aiany are men of very small wage-earn-ing capacity. There are many other' aspects of the position, in this matter of mortgage finance and the Government’s proposals, upon which comment could be made. But it is of interest to refer to the, general‘approval expressed by the Council of the New Zealand Law Society of tile report issued by the Conference convened by the Associated Chambers of Commerce. The legal profession may be described as representing both interests, for it is at the service of both, and fully as much concerned with the general prosperity of all as is any other section of the community. The Law Society not only carried this resolution, but added in regard to pending legislation dealing with rehabilitation proposals, as known at the moment:

That this Cbuncil is of opinion that it should he a fundamental principle of any proposal for rehabilitation of rural finance that any loss of capital incidental to such rehabilitation should be spread over the whole community and not thrown solely upon any single section of the community. The official report which conveys the passing of this resolution indicates that it was “carried with one dissentient.” One is constrained to wonder whether the “one dissentient” is a “Dictator” in embryo! However, the whole position is one calling for national and non-party consideration, and we reiterate that such is the treatment which should be accorded it.