FARM MORTGAGES

New Zealand Herald, Volume LXXII, Issue 22058, 14 March 1935, Page 13

FARM MORTGAGES

THE PLAN FOR BELIEF CRITICISM IN CAUCUS ADMISSION BY MR. FORBES METHOD OF FIXING EQUITY [BY TELEGRAPH —SPECIAL REPORTER] WELLINGTON, Wednesday It was learned on good authority this evening that the second reading of the Rural Mortgagors Final Adjustment Bill in its present form is assured, but it is likely that the committee stages will . be difficult unless some changes are made in the clauses dealing with the final adjustment of liabilities at. the end of the budgetary period of control. A frank admission that one important feature of the bill had been freely criticised in caucus, and that amendments were being drafted with a view to meeting the wishes of members, was made by the Prime Minister, Mr. Forbes, in an interview this evening. The "bone of contention," as Mr. Forbes called it, is in Part V. of the bill, whioli prescribes the method of making the final adjustment of liabilities at the conclusion of the budgetary control period of five years. In the case of farmer mortgagors who will work under that system the bill in its present form prescribes that the Court of Review should, at the end of the term, make an order defining the value of the mortgagor's equity in his property, and it is expressly stated that in no case shall the value of the equity be assessed at more than. 20 per cent, of the basic value. Mr. Poison's Absence The bill has been considered at two caucuses of the Coalition Party, one meeting being held yesterday and the other to-day. Mr. W. J. Poison (Stratford) did not attend either meeting. It is understood that no special significance attached to his absence yesterday, but that he was purposely absent to-day because of his "brush" with the Minister of Finance, Mr. Coates, in the House of Representatives last night regarding whether or not Mr. Poison had divulged caucus discussions in the course of his campaign against the Mortgage Corporation, Bill. Invited to-night to' define his attitude to the party, and to state in particular whether he would attend future caucus meetings, Mr. Poison replied: "I am like brer rabbit. I have nothing to say." Attitude of Mr. Harris Another absentee from to-day's caucus was Mr. A. Harris (Waitemata). He attended yesterday's caucus and it is reported that he revealed himself as an opponent to the bill. It will be re- I called that he found himself similarly at variance with the Government when the exchange rate was raised, and for a period following that development he did not attend party meetings. Meanwhile he has shifted his position in the House from the main Government benches to a place on the cross-benches occupied by other Government members and some Independents. Beyond admitting that he was not at to-day's caucus, Mr. Harris was unwilling to comment on his position in the party when interviewed to-day, but he said his change of seat had been made purely for the purpose of having a better view of the Chamber. He voted in favour of the third reading of the Mortgage Corporation Bill to-day, whereas Mr. Poison voted against it. Another member reported not to be enamoured of the latest bill is Mr. W. j P. Endean (Parnell). However, it is i officially stated that he has no thought j of parting company with the GovernI ment, but that he made clear to the | party leaders in caucus that the feeling |in his constituency is against some | features of the bill. | Reports Contradicted

"That is definitely not so," said the Prime Minister, when commenting on reports that the party leaders were concerned at the reception given the bill by the caucus. "Anyone would think that we had been having stormy meetings and had reached a critical stage. In fact, the bill has been discussed without any heat and the caucus today was no different from others that have been held. It is certainly true that some members do not like the provision about the 20 per cent equity, but it has to be remembered that 20 per cent is the maximum.

"Most of the time was taken up by members giving illustrations to show that that feature of the bill would not work out in the best interests. There is no doubt that all members were unanimous in agreeing that something should be done to help farmermortgagors, and the Government desires to give relief in the way that is; most acceptable. Mr. Coates promised to consider representations made by members, to see whether that section of the bill could not be modified to meet their wishes." i Another Caucus Probable

It was probable, continued Mr. Forbes, that another caucus would be held, possibly to-morrow night, to consider that aspect of the bill again in the light of any amendments that might be made to it.

Some Coalition members, it is understood, object to any equity being granted to the mortgagor, but it is believed that Mr. Coates considers such an incentive should be held out and that actually the effect of the provision will help rather than hamper tho mortgagee. Other members are prepared to accept an equity arrangement on a reduced scale, but against that it ha» been pointed out that the bill prescribe.'! a maximum of 20 per cent, which means that in many cases it will not be a» great as 20 per cent.

Further, it is argued by supporters of the bill in its present form that not a great many farmers, compared with the total, will .require to be placed under the five year scheme which, incidentally, is said to have worked well when adopted by certain private institutions in the Auckland Province. Concern of City Members

Another point of concern to somo city members is that the bill is restricted to the rural mortgagor. It i« believed that the Cabinet is not able to see how such a scheme could be worked in the case of urban properties, and at the moment it does not appear there is any prospect of the scope of th<? legislation being enlarged in that way. With a view to devising some acceptable amendment to the present draft several Coalition members conferred tonight with the Expert Advisory Committee, but the discussions have not yet reached a practical stage. In the meantime, the second reading is not expected to be begun until Friday, nnd the crucial test is expected to come when Part V. is under review in Committee unless, of course, some method of meeting the wishes of soma members and allaying the doubts of others can be devised.