"UNJUST ACTION"

New Zealand Herald, Volume LXXIII, Issue 22525, 16 September 1936, Page 15

"UNJUST ACTION"

DANGERS OF SCHEME MORTGAGEE AS SCAPEGOAT SIR A. RANSOM'S CLAIMS [BY TELEORAPH —SPECIAL REPORTER] WELLINGTON, Tuesday The action of the Government in bringing mortgage contracts entered into since 19.11 within the scopo of the Mortgagors and Lessees Rehabilitation Bill was strongly criticised by Sir Alfred Ransom (Opposition—Pahiatua) during the debate on the bill in the House of Representatives to-night. The contracts, he said, had been made with a full knowledge of the conditions existing and in those circumstances it was most unfair to the mortgagee to pass legislation adversely affecting his investment.

Sir Alfred said that another unfair clause in the bill was that basing the productive value of a farm on prices ruling ovor a period from eight to ten years. Last year had been a good season for sheep farmers, but under the bill the prices received that season would be excluded from the calculation fixing the value of a property. There was a grave underlying danger in the legislation that might injure the credit of the client farmer, which would be a serious state of affairs for the primary producers. The Rate of Interest Such an important matter as the rate of interest was not mentioned in the bill, but was to bo gazetted at some future date. There was special provision whereby private arrangements could bo made by Government Departments and trustees if they were Confirmed by the Court of Review. If such a provision was good for the State and trustees, surely it was equally as good for private mortgagors and mortgagees.

The Government, added Sir Alfred, appeared to imagine that there was an obligation on it to amend any legislation passed by the previous Government. The general principles of the bill would be inequitable in operation. The Rural Mortgagors Final Adjustment Act was one of the most far reaching measures ever passed in New Zealand and, as other speakers had said, probably cost the late Government a lot of popularity. In his opinion, however, the present bill was even more objectionable. Gambling on Remissions The proposals in the bill would make investments in landed property most unpopular and for that reason, if no other, the Government should give the measure very careful consideration. " Had it not been for the financial assistance of mortgagees in the past New Zealand would not be in the position it is to-day of being the greatest exporter of butter and cheese in the world," said Sir Alfred. " The mortgagee is being made the scapegoat to rehabilitate the farmer when the Government itself promised to do so by guaranteed prices. " A grave injustice will be done to a large section of the community. Mortgagors are to be given the right to sell on a rising market at the mortgagees' expense. They are to be permitted to capitalise remissions and gamble on them."