THE MORATORIUM.

Otago Daily Times, Issue 19257, 22 August 1924, Page 9

THE MORATORIUM.

FINAL EXTENSION BILL. PARTY LEADERS CRITICISED. At the annual meeting of the Dunedin Chamber oi Commerce last night, the president (Mr Peter Barr), in referring to thw moratorium, said ho considered he was sue in saying that the Mortgages :<Tinai Extension Bill, now before Parliament tinder the name of Mr Massey, met with the approval of the chamber. Under the Bill it was proposed to enact that on notice of motion filed by a mortgagor not later that December Si next, the court might extend the due date of a mortgage for not longer Ulan two yearn, or until December 31 1926. The noteworthy features ol the Bill were that the onus of moving the court for an extension order was now to be placed upon the mortgagor, and the tact that it at last puts an end to this special war legislation. There was a pathetic touch m that word “final” in the title Of the Bill, for, after the repeated extensions,. numbers of trustees; end moneylenders had wondered *f the time would ever oouw when thev would again have the investment of their own money. lha chamber pointed out as far back jia 191 S that the onus of proof that powers of sale .should not be executed under certain circumstances should lie upon the mortgagor) and the time bad, in his judgment, long passed when that should 'be recognise* Person all v. he hud considerable doubt whether ’this legislation should ever have been passed, and whether ou the whole it had not done more harm than good: The object aimed at was undoubtedly commendable—to protect the borrower, and more especially the primary producer, from pressure at the hands of the lender darjiir. times of war and distress. It was true that “the powers and rights of mort-; gageos" were not ignored, but they were* severely restricted, and it would probably be not vorv far wrong to say that tbp, whole underlying assumption was that lenders were 'financial wolves, ’ to. adopt the phrase used by the Leader of the AJPt' position in ids speech on the present Bp!, while tho difficulties and hardships of lenders whoso actual living might have depended upon their investments, were undoubtedly increased. However that might, be, it was indisputable *nat tho existence' of the moratorium had led in many. caa«! to the earnings of the farmer during -proa-. 1 peroas years being applied to anv othM?, purpose than that ot paying off his in- . debtedness and thereby improving his pMtfci tion, and to that extent it had done hfflj also more harm than good. Ho spoke wrtb ; some knowledge so far ns Otago and Bouatv land were concerned when he expressed tno/ opinion that tho lifting ot the moratorium would not cause any serious trouble, but. . would put, an end to a position that should; be ended as soon as possible. He bee. 1 loved that the great majority of mortgages on farming properties that were. «*■ existence before October, lfl9 (tioso ot later date were not affected had been paid off or renewed, and than ot tne, remainder, the most of the mortgagors, would be well advised to face the position; and realise, instead of dragging on under. sm over-heavy burden. Thus would Bet them free to make a fresh start even it in a small way, and would compel tho mortgagee also to face and ‘cut his The difficulties were evidently considerably greater in the North Island than m, should he say the more cautious South, but in. the long run ho believed that rven there, the sooner the present restrictions ware ended the bettor. It seemed to be almost; entirely overlooked that tne interests (n the mortgagee and mortgagor, althoughnot identical were at least tht* same as. regards the property being worked to protit and maintained in good order, and no sao» lender had any desire to turn the farmer out or to have the security thrown on his hands. Indeed, it was to his own, interest to come to any reasonable arrangement with the borrower for extension of (he loan if necessary, even a though- I* might involve a reduction in the rate, of '"Mr* Wilford was reported as having said (hat it was “a perfectly silly proposal to, lift the moratorium at present, when there was no money in the country. ’ His (tna speaker’s) comment on this was that u* would bo “a perfectly silly proposal -to allow the present restrictions, whichvwwe delaying a. return to nornial conditions, to remain any longer, _ especially as there v r plenty of “money in the country, m it proved by the wonderful response to the demands of municipal and other pubyo k°Tbe' Leader of the Labour Parly mid, that the Bill would be useless . unless made provision for a reduction in the >ntorcst charges which tho farmer had to pa T ’. “The Mortgages Extension Act. 1921,” fixed the rate of interest on mortgages continued under its protection at 61 per cent., which was surely not exorbitant, so that Mr Holland’s comment appeared to be beside the mark, and only, made to encourage the idea of oppression; by “financial wolves,” and danger, of - tho tragedies suggested by Mr Wilford being brought about through their heartles?n<?*s. He had now given notice of an amend?, mnnt providing that mortgages not other*; wi«e mutually arranged were to he taken over by the State at the “productive, value” of Die properties apparently without, any margin of safety, and without any inquiry as to the fitness of the borrower (o carry on the farm, and that the Minister, of Finance might, borrow for that purpose at the rate of not more than £6,000,000 per annum ! Why. asked Mr Barr, should the State take over this burden, and not; the liabilities of business houses which have over-borrowed on debentures, or over-im-ported merchandise? _ Whv should - the country ho saddled with still heavier taga--tion on loans up to £6,000,000 per antifliwi' to relieve either lenders or borrowers, who have made bad bargains? The whole idea seemed preposterous, and it was impossible(,o believe that either Reform or Liberal Parties would assise io bring it into law. He trusted that the Government would be finn in insisting on the passing of this; Biil, and would not agree to the post* ponoment of its coming into operation for even three months, . He submitted with due respect that bothMr Holland and Mr Wilford were quite astray when they contended that tho farmer of to-day was suffering from the burden of usurious rates of interest imposed by grasping money-lenders. Tho real position appeared to hint to be that he suffered mainly from the fact that,, owing to increased costs, ho had to pav dearly for nearly everything he required,; while at, the same time compelled to 00-,' eept (lie world’s competitive prices for his, products, a condition of affairs which neither he nor tho Government could con-, trol. But. ns if this were not, sufficient, be also suffered from what could be con-, trolled, or at least modified—vise, continuous heavy taxation, and a differentiation in the incidence of tax which preventedhim from being aide to obtain advances' on tho security of his property. When Parliament abolished the difference in tax charged on interest received from mortgages and from debentures, and ended the moratorium, the position of the farmer would be distinctly better and more hopeful.—(Applause.)