THE MORATORIUM.

Otago Daily Times, Issue 19204, 21 June 1924, Page 14

THE MORATORIUM.

THE QUESTION OF AN EXTENSION.

Mr William Watson, acting chairman ot directors of the Bank of New Zealand, said in the course of his speech at tho annual meeting of tho bank yesterday:— The moratorium on mortgages will expire at the end of this year, and tho public mind is exercised as to whether there will bo any extension of it or not. Tho Act has been in force for 10 years—some of those years the most _ prosperous the dominion has ever experienced—therefore, logically, mortgagors who have been sheltering under its provisions should now be loft to face their positions. New Zealand is the only country in the British Empire, if not in the world, in which a moratorium on mortgages has been renewed from time to time for such a long period, so that it cannot be said that mortgagors have not received a maximum of consideration. The artificially high range of land values, largely the result of the moratorium, prevents investment by many possessing the capital and energy to further increase production. Many lenders on mortgage have lost heavily from depreciation in values of their securities; others have narrowly escaped loss after a period of great anxiety, besides being so long deprived of their capital for other uses. These conditions have caused lenders to look askance on mortgages as means of investment except when large margins of security and high rates of interest are offered. It is in the lawt interests of the country that the mortgage on broad acres should again become a favourite form of investment. but it will not. if there ig reason to fear that the contract between lender and borrower may be set aside by legislative interference with scant consideration for tho lender. The Advances to Settlers’ Department of the Government has lent some two and

a-hu!f millions on farm lands during the 12 months ended 31st March. Much of this amount has no doubt been applied in clearance of mortgages affected by tho moratorium, but a considerable gum must have been obtained simply because the department charges a lower rate than other lenders. While on the one hand it is known that some mortgagors have taken advantage of the law to retain money for other purposes than paying off their overdue mortgages, it is inevitable that a number will have to surrender their properties, and there is but little reason for the majority of them to hope that extra time would do more than postpone the evil day. It may bo safely asserted that, except in a very few cases, the causes of failure are duo to pur chasing land at inflated prices, acquiring more land than purchasers’ capital war ranted, and incompetent farming. For such it would certainly be against the interests of the country that further extension should take place. it may be, how ever that a very few cases merit consideration, and these might well be referred to the Supremo Court as is now done in some cases of arrears of interest, tho court to decide as to an equitable arrangement between the parties according to the special circumstances.