MORTGAGE FINANCE

Otago Daily Times, Issue 22498, 16 February 1935, Page 12

MORTGAGE FINANCE

Theke are various grounds upon which the proposals contained in the Mortgage ' Corporation Bill expose themselves for criticism. The Leader of the . Opposition, however, based his objections to the measure upon considei’ations which cannot possibly be regarded as sound by anyone who has not an ineradicable belief in the virtue of paper money issued, as Mr Savage put it, on the credit of the State. Mr Savage would have it that all the finance necessary to meet the requirements of farmers and others, who are in circumstances of difficulty, could be met by an extension of the operations of the State Advances Office if it were empowered to issue money. Whether the State Advances Office is short of money for the discharge of its functions is a point 'concerning which Mr Savage and the Government are apparently at variance. The Minister of Lands specifically denied yesterday that there was any shortage of its funds. But already it has on its hands securities to the value of about £50,000,000, and the Government believes that the creation of a National Mortgage Corporation, to which the sound securities held by the State Advances Office should be transferred, would enable the mortgagors to that Office, and other farmers who have security to offer, to obtain their finance on better terms than are now possible. “Not,” says the Opposition, “if the State Advances Office issues its own money.” It is a touching faith which the Socialists profess in the possibilities of curing economic ills by recourse to the printing press. The experience of other countries which, even in modern times, have issued a flood of paper money, with no tangible backing is conveniently ignored by them. Mr Savage combines with the issue of paper money his party’s proposal that the producers of the country should receive guaranteed prices for their goods. It is a proposal which, it may be presumed, is expected to prove a good electioneering card this year. Any elector of average 4 intelligence must realise, however, that prices cannot be guaranteed unless the guaranted is extended also to other things—certainly to salaries and wages and to profits—so that it would simply be another of those “vicious circles,” about which we hear a good deal, that would be introduced under Socialist patronage. It would be an easy and simple matter, we may told, to give and to honour all those guarantees if the State printing presses were kept so busy that there would be an uninterrupted stream of cheap paper money. That the mbney would become cheap cannot reasonably be doubted. It would become so cheap as to be in danger of being valueless. German paper marks might be purchased by the bucketful for an old song less than fifteen years ago.