THE MORATORIUM

New Zealand Herald, Volume LVI, Issue 17263, 12 September 1919, Page 6

THE MORATORIUM

The proposals of the Government for the relaxation of the moratorium, as revealed by a Bill introduced into the Legislative Council, have at least the merit of simplicity. It is contemplated that the moratorium should continue until the end of next year, without applying to mortgages contracted afcer the passing of the Bill, and that mortgagees who wish to call in money shall apply to the Supreme Court, which shall have discretionary power to refuse or grant the application, or increase the rale of interest. From the point of view of the mortgagor, the measure must be described as fair, and even generous. Fifteen months are allowed in which to make new financial arrangements, and the period is so lengthy that there can be no possibility of hardship. Unless a large number of people prove to be incredibly foolish, there should be little disturbance of the money market, and mortgagors who prejudice themselves by waiting till the last moment will deserve little sympathy. The system adopted in Australia, under which mortgages are to be terminated in rotation, in order of the dates of their original ! maturity, has some points in its favour, and certainly eliminates the possibility of financial disturbance, but it has to be noted that under the New Zealand Government's proposals a longer period is allowed for readjustment. In Australia, protection will expire absolutely in June, 1920; in New Zealand, not till six months later. This> indeed, is a feature of the Bill which is open to serious criticism by mortgagees. Money which has been on loan for a long period at rates below those now current will be protected for fifteen months unless the mortgagee exercises his right of appealing to the Supreme Court. In spite of the Attorney-General's assurance that it has been made quite cheap for people to go to the court, this is a process which will be worth employing only for the larger mortgages. In respect to smaller sums, lenders will be forced to wait with what patience they can command for the expiry of the moratorium.