THE OTAGO DAILY TIMES THURSDAY, AUGUST 14, 1924.

Otago Daily Times, Issue 19250, 14 August 1924, Page 6

THE OTAGO DAILY TIMES THURSDAY, AUGUST 14, 1924.

THE MORATORIUM. The result of the division in tho Lower House on the second reading of the Mortgages Final Extension Bill, which is designed to extend the period of the moratorium in certain cases, suggests that the measure will receive the endorsement of Parliament. We have already expressed the opinion that the moratorium should be allowed to expire at the end of the present year and that no really useful object is likely to be achieved by granting an additional period of grace to those who have received the benefit of it. There is no other country in the world in which the expedient of the moratorium that was introduced to meet the exceptional conditions of tho war years remains in force. Already the moratorium has been extended on three or four occasions in New Zealand and it should really be only under the influence of compelling necessity that there should be any additional, extension of it or even any conditional extension such as is proposed in tho Bill that is now before Parliament. The report of the discussion on the second reading of tbe Bill failed, however, to disclose any convincing argument in favour of the prolongation of the operation of an expedient which should, according to the original intention, have ceased to have effect four years ago. The plea that mortgagors should be afforded au opportunity of recovering their position is one that might just as logically be advanced in support of an indefinite extension of the moratorium as in support of the proposal of the Leader of the Opposition that there should he an extension for eighteen months. Tho Mortgages Final Extension Bill actually offers to mortgagors a greater amount of protection than would be afforded to them if Mr Wilford’s view were adopted, for it proposes that, through an inexpensive legal process, those of them who have a reasonable prospect of recovery may secure from tho Supreme Court au extension of the moratorium until December 31, 1926. This provision is interpreted by Mr Sidey as an admission that the time has not arrived when tho moratorium should be lifted. It is, at any rate, a generous concession to a mild clamour of which the fairness is not conclusively apparent. Without any knowledge as to the amount of money that is actually involved under the moratorium—a point on which Mr Massey himself was unable to enlighten Parliament—we are strongly disposed to accept the assurance of the most competent financial authorities in the country that no avoidable hardships would be caused if the protection of the moratorium were withdrawn at the end of this year and that no great difficulty would arise over the adjustment of the mortgages that would then have to be dealt with. The Labour Party, it will have been observed, has its own special plan for offering relief to embarrassed farmers who are what Mr Savage calls “ real triers.” We cannot pretend, however, to understand what it actually means. In the first place, however, it seems that the Labour Party is concerned about the interest charges which the farmer has to pay and that it dislikes the Government’s proposal because it makes no provision for the reduction of these charges. If it is contemplated that there shall be an arbitrary variation by Parliament of the terms of a covenant into which two parties have entered the proposal involves a novel departure in legislative enactments. In the second place, Mr Holland says the policy of his party is that the State should take over undischarged mortgages at the real values of the properties that are secured under them. If this means simply that the mortgage should be transferred to the State, at a reduced rate of interest with a reduced margin of security, the proposal seems to be one under which the State would accept risks that would he rejected by any financial institution. If so, it furnishes only au additional illustration of the unsoundness of the principles of finance that pass current in some political quarters.