MORTGAGE LEGISLATION

New Zealand Herald, Volume LXIX, Issue 21349, 25 November 1932, Page 10

MORTGAGE LEGISLATION

The second reading debate on the Mortgagors and Tenants Further Relief Bill, as reported, indicates an almost incredible degree of superficiality and carelessness in the House of Representatives in dealing with legislation that affects principles once regarded as weighty. The Minister of Justice assured the House that the measure contained nothing to inflict hardship on anybody. With one exception, Mr. Barnard, members appear to have accepted this broad statement as complacently as the Minister made it. Yet not even Mr. Barnard's protest, that mortgagees still have some claim to consideration, awakened any response. He described recent legislation as continuous and arbitrary interference with mortgage contracts, and discussed the immediate effect on mortgagees, whose position could not possibly have been known in detail by the Minister. Mr. Barnard was quite justified in his observations. But there is also the question of more remote consequences, of which the Government should not be unmindful. The first measure of this character was passed in the short session of 1031, and given currency until December 31 this year. Mortgages entered into subsequent to its commencement and existent mortgages varied or renewed after that date wei'e exempted from its provisions. Before 1931 had run its course there was an amendment elaborating the original measure, increasing its scope and extending its life to the end of 1933. This year's short session saw still another amendment, now there is yet another, in which, incidentally, mortgages removed from the operation of the law by being renewed or extended, in terms of the original measure, are brought back within its influence. If, as the Prime Minister predicted, there is a short session early next year, what more certain than another amendment? Such procedure richly deserves the description "arbitrary and continuous interference." The result must inevitably be that lending on mortgage will become an investment that nobody with an ele-

mentary sense of caution will contemplate. This form of security has steadily lost caste because of the interference with contracts which began during the war. That, however, was amateurish compared with what has been done since. If, with the State out of business as a lender —as it seems destined to be —and private investors warned off land as a security for loans by such legislation, it becomes utterly impossible to borrow money on mortgage, the remoter consequences will be manifest. This is not an impossibility. It must be regarded as a very probable development from careless superficial law-making.