SANCTITY OF CONTRACT.

New Zealand Herald, Volume LXIX, Issue 21116, 25 February 1932, Page 14

SANCTITY OF CONTRACT.

Sir, —Surely the letter of "Sine Nomine" calls for comment. Whe'never an investor intends to invest on some security be sends his own valuer to value tho security at tho mortgagor's expense and sees that the valuation is not on the high side. On this valuation he advances anything from 50 to 75 per cent, and so makes himself quite secure. Surely he needs no other protection. More Fairplay. Sir, —"P.N.in speaking of falling prices, points out. how those with fixed incomes, from interest, are now reaping the benefit; how the proclucei, the shareholder and landlord ai'e suffering through the fall in income, but he is careful not to point out how these people had tho full benefit of the long period of prosperity, when prices for produce, dividends and rents were rising and again rising, while the man with the fixed income, whose capital was providing the good times, was himself having a very lean time. T wonder what would have been the point of view of your correspondent had the fixed income man, then, asked for his contract to have been altered. 1 daresay, at that time, "P.N." was applauding the foresight, of the borrowing powers in securing long-term contracts. which fixed the lender's income so that he alone could not participate in the general rise in prices. Wages, rates, rents and commodities soared out of all reason, but interest certainly did not rise as well. The fiction lies in the increase in wages, rents, etc. We received no extra value from these sources in return, on the other hand, we surely derived some benefit from the money we borrowed. During the war period the patriotism of the people was appealed to to induce them to lend their money; thousands of people put, their savings into war bonds at a low rate of interest. This, to-day. is their only income, their self-provided superannuation. They lent, on the honour of their country's representatives, on a mere scrap of paper. Are we, to-day, going to prove that we were not honest ? I think not! Honour Thy Bond.