THE SANCTITY OF CONTRACT

Otago Daily Times, Issue 21978, 13 June 1933, Page 6

THE SANCTITY OF CONTRACT

TO THE EDITOR. \ SlB, —Every elector ought to read carefully the views of Dr W. C. Sadlier, Bishop of Nelson, on the “ Sanctity of Contracts',” as published in your Saturday’s issue. It is rarely that the public has an opportunity to hear from the Church upon matters of morals when these are related to politics, the usual explanation being that the Church has nothing to do with politics. It happens, however, that in this instance the Anglican Church is seriously affected by the financial policy of the Government in reducing the rate of interest upon trust funds. Bishop Sadlier said: “Up to the year 1932 we were under the impression that a contractual obligation, once formed, wag binding on both parties thereto, and could not be broken by either without the consent of the other, or without a penalty in. the-'case of the violation of the contract. But the facts presented to us this year in the compulsory reduction in interest in investments, shows that our impressions as to the moral and legal obligations of contracting parties was unfounded.”

By a singular chance it happens that a fairly complete explanation of Bishop Sadlicr’s accusations of breach of contract is found in the same issue in your report of the Perpetual Trustees Company’s annual meeting at which the chairman of directors (Mr W. E. Reynolds) and Mr Downie Stewart explained the economic conditions that forced the Government to take the unpleasant course of violating the sanctity of contracts. To one reflecting upon these conditions- it becomes plain that even Bishop Sadlier, had he been Minister of Finance, would have been forced to violate the sanctity of contract, because changed circumstances have now placed every person with pecuniary obligations, in such a position that he is prevented from fulfilling them. That is a position totally different from individual cases under pre-war conditions when trade was much less disturbed by currency inflation than it is at present. Nevertheless, Bishop Sadlier’s statement about the sanctity of contracts is perfectly sound. It. however, opens up other vital questions which the Church avoids and declares to be outside its sphere of influence. Why, for example, should the bishop object to a violation of contract when the result of such violation reduces the income of the church and be quite silent when a violation of contract reduces wages of the whole community, as was the case when the Government enforced the compulsory reduction in wages by about 20 per cent.? Does it not sound and out of harmony with Christian ethics to raise the- question of sanctity of contract when the same reasons for the reduction apply in both cases? It was by the reduction in wages that a reaction reduced profit, which is the only source whence interest can he paid._ Curtailed profit inevitably reduces interest, a nhtura 1 sequence following cause and effect in accordance with the will of God. If it be right to induce wages why would

it not be right also to reduce rent and interest in a corresponding ratio? Moreover, there is another important consideration to be explained. What evidence have we that a contract when it is drawn up is in accordance with Christian ethics? Quite apart from Christian ethics, a contract can be perfectly legal, but apart from Christian ethics it is devoid of all sanctity.—l am, etc., W. Siveutsen.