AFTERMATH OF BOOM.

New Zealand Herald, Volume LXII, Issue 18946, 18 February 1925, Page 10

AFTERMATH OF BOOM.

REVALUATION PROBLEMS. SECTION TWO MORTGAGES. SOME TYPICAL INSTANCES. THE GOVERNMENT'S CRITICS. [ [BY TILEGBAFH.—PRESS ASSOCIATION. J | ' WELLINGTON. Tuesday. Much difficulty has been experienced . by the Revaluation Board in dealing with the embarrassments of soldier settlers who , purchased farms under section 2 of the Discharged Soldiers' Settlement Act, whefa the Crown came in as first morti gage© with financial assistance up to £2600 toward purchase of the i farm, and £750 for improvements - and stock. In quite 50 per i cent, of this class of purchase, second mortgages were given by soldiers to the vendors to cover the balances of the purchase price. In very few cases coming before the Revaluation Board was there equity to cover these second or subse- , quent mortgages in full and extreme difficulty is being experienced in getting the i second mortgagees to meet the position. "Here is a case typical of scores," said the Minister for Lands, Hon. A. D. McLeod to-day, picking up a file from his ■ desk. "The original purchase price paid by 1 the soldier (who described himself in his application for loan as having had a lifetime experience of farming) was £3450. The Crown advanced £2500 on first mortgage, the soldier giving the vendor a second mortgage for tho balance. Revaluation to-day places the value of the farm at £2200, The holder of the second mortgage will agree to accept nothing less than £SOO to clear his mortgage. There being no equity for even 500 farthings, much less £SOO, the Audit Department rightly says that a further advance cannot be made. How is tho second mortgage m these circumstances to bo removed ? Only by foreclosure, either by the Crown or by the second mortgagee. If by the latter, he will be called upon to repay to the Crown in cash all moneys advanced under the (first mortgage. Further Aid Mot Easy. _ "Here is another file showing difficulties much easier of solution. In this case £2500 has been advanced by the Crown by way of first mortgage. A second mortgage exists for £6OO. The Re-valuation Board places the value of tho whole property at £2750 and the second mortgagee says ho will accept £250 in cash. As the soldier has uot drawn up to his maximum on current account, the board recommended the commissioner to advance £250, and charge it to the soldier's current account, and thus discharge the second mortgage. "Another ease typical of many: The original purchase price was £4650. The Cromi advanced £2500 toward the purchase and £750 for improvements and stock. The Revaluation Board places the present value at £3500. The second mortgagee states that he will accept £IOOO cash; for his £2150 mortgage. Although there appears to be equity for this amount, it is impossible to raise the current account to £1750 or to increase the instalment mortgage by such a large amount without -raising further capital loans. If new borrowed money is to be provided, can it not bo fairly asked by Parliament or others concerned whether it is justice to find £IOOO additional money for a soldier already settled in preference to hundreds of soldiers who may still require farms or houses, and as yet have had no financial assistance, or again, would not a soldier who has purchased land without State assistance have equal claims to a £IOOO loan if he is experiencing difficulty in renewing the whole •or part of his private mortgages? First Pressure, How Blame. "It is not only the soldier settlers who are up against the settlement trouble," the Minister continued. "I have had many interviews with second mortgagees who state that immediately after receiving cash for a farm sold to a soldier, they purchased another farm, and since then have had to walk out without a shilling. Many of these men have large families and are compelled to start again with 25 or 30 years' savings lost in the slump. The reading of many of these files would make a cynic of almost any man. Letters are to be found in plenty written during the boom days of 1919-20, not only by soldiers, but also by soldiers' relatives, stating that they were experienced farmers, knew all about values, and that the Government's hesitation in making advances upon farms they had selected amounted to proof that no sympathy was being extended to genuine soldier settlers by the then Minister. To-day the boot is on the other foot, and the Government is again asked to carry the blame, often by the same people who cry that the Government might have known that, values were too high, etc. However, crying over spilt milk is foolish at any time. If seeming delays are taking place in clearing up the almost interminable difficulties associated with section 2 mortgages, soldier settlers may rest assured that the ; Dominion Revaluation Board and officers of my department are doing their utmost to arrive at finality with reasonable fairness to all, including the general taxpayers." PROGRESS OF REVALUATION COMPLETION IN VIEW. CONCESSIONS NEARLY £2,000,000. I [BX TELEGRAPH. —PRESS ASSOCIATION.] WELKIN GTON. Tuesday. Apart .from a few settlements where further investigation is intended, the revaluation of soldiers' farms is now nearing completion, and early in March most of the difficulties should have been removed, at least so far as soldier settlement on Crown lands is concerned, said the Minis--tor lor Lands, Hon; A. D. McLcod, today. The position of the Dominion Revaluation Board to date is as follows:—Applications for revaluation, 5347; determined for revaluation, 4860 ( 90.9 per cent.); still to bo determined, 487 (9.1 per cent.); reductions in respect of 4648 cases, capital value of leaseholds, £1,415,635; reduction on mortgages under section 2, £566,100; total, £1,981,735. Tho board has negotiated with private mortgagees and unsecured creditors for the purpose of having debts discharged or reduced,, to afford soldiers relief. The total amount owing by soldiers; affected was £103,722, and, as tho result of the board's negotiations, reduction in these debts amounting to £69,454 has been secured. In addition tho Dominion Board has completed negotiations for the purchase of private mortgages totalling £28,467, which have been purchased at a discount of £13,449, i.e., the mortgages have been purchased for £15,018.