MORTGAGE VALUES

Otago Daily Times, Issue 21994, 1 July 1933, Page 10

MORTGAGE VALUES

The members of a deputation from the North Taranaki Executive of the Farmers’ Union, which waited on the acting Prime Minister this week with a request that the farmers’ position might be “stabilised,” seem to be less reasonable than the delegates at the annual provincial conference of the union in Otago were. There was some talk a few weeks ago at this provincial conference which could only be construed as evincing a desire that capital sums lent on mortgage should be statutorily reduced. The resolution that was eventually adopted by the conference was, however, one that was judiciously toned-down in such a way as to express a claim only that the interest indebtedness of farmers

should be brought into relation with existing facts. The farmers in North Taranaki would not be satisfied with that. It would not be regarded by them as constituting a sufficient step towards the “ stabilisation ” which they seek. There was no attempt on their part, when they were interviewing Mr Coates, to disguise the fact that a downward revision of mortgage values is their aim. A downward revision of, mortgage values can only mean a writing-off of a proportion of the mortgage liability. Presumably it was represented to Mr Coates that the Government should introduce legislation to require that the mortgagee shall cancel a part of the debt owing to him. Why otherwise should the attention of the Minister be directed to the matter? If it is actually proposed that a “ cut ” shall be compulsorily made in the principal sums that have been lent on mortgage, the conclusion must be that the “ stabilisation ” of the position, which, it is pleaded, is necessary to “give fresh heart ” to the farming industry, is to be effected at the expense of the mortgagees. The principle of justice upon which the mortgagees should be required to make a gift of a tion of the money lent by them is not apparent. In some cases, no doubt, that have been the subject of investigation by Mortgagors’ Liability’Adjustment Commissions, the amount of the principal sum advanced has been reduced. But this has been done voluntarily on the part of the mortgagee to bring; the amount of the mortgage into fair relationship with the value of the security. The application of compulsion in the matter of the reduction of mortgage values might be said to represent an extension only of a plan of an annulment of contracts of which the Dominion has been having an unfortunate experience. Even, however, the fact that a precedent has been established for the statutory variation of the terms of agreements of many descriptions will hardly reconcile the community to the view that the amount of a debt incurred by a man in a private transaction may be ruthlessly cut down by legislative enactment. Since the State is itself by far the largest mortgagee of rural lands, the ordinary .taxpayer has a direct interest in any proposal for a downward revision of mortgage values. This circumstance may assist him to A sound conclusion upon the merits that may be claimed for the proposal.