DANGERS OUTLINED

Otago Daily Times, Issue 22630, 23 July 1935, Page 5

DANGERS OUTLINED

RECENT LEGISLATION EFFECT ON PUBLIC CONFIDENCE CIRCULATION OF CAPITAL The danger that legislation passed to meet the difficulties of the times might interfere with natural economic forces was pointed out by Mr C. B. Barrowdough in his presidential address at the annual meeting of the Dunedin Chamber of Commerce last night, and he expressed the belief that public confidence had been shaken to some extent by the Acts which had recently come into operation.

“ The emergency session of Parliament, recently concluded, passed what we may hope is the last of much novel legislation —necessarily novel, perhaps, as it was designed to meet novel circumstances,” said Mr Barrowclough. Proceeding to give a review of the legislation which had come into operation, he passed over the mortgage relief legislation with only brief mention. Referring to the National Mortgage Corporation, he stated that the attempt to amalgamate the Government lending departments and to divorce them to some extent from Government control might be applauded. It was, however, difficult to see the necessity for the Government to interfere and create a further lending institution to compete with private lending at a time when interest rates were lower and money more plentiful than had previously been known in this Dominion. A GROWING EVIL

The effect of the Agricultural (Emergency Powers) Act was that a commission of four, primarily established (and properly) to co-ordinate the work of the various hoards (elected by the industries they represented) might by Order-in-Council take over the whole control of the primary industries. “ There is a further novel extension of Orders-in-Council —a growing evil which has constantly been commented on by this chamber and the Associated Chambers,” he stated. “ Ordinarily Orders-in-Coiincil are strictly limited under the Act which authorises their issue, and if they exceed those limits they may be declared ultra vires by our courts. Orders-in-Council under this Act may even over-ride Acts of the Legislature subject to the safeguard that they must be subsequently laid before Parliament.”

He mentioned the Companies (Bondholders Incorporation) Act, not to quarrel with its general import, but to deal with a certain section which in a similar form had found its way into other legislation. Section 10 of the Act read: “The commission may act on any testimony, sworn or unsworn, and may receive as evidence any statement, document, information or matter that in the opinion of the commission may assist the commission to deal effectually with the matters before it, whether or not the same would be legally admissible as evidence in a court of law.” Further, the sittings of the commission were not open to the public, and_ no report of any evidence or proceedings might be given without the consent of the commission. A BAD PRECEDENT He appreciated the difficulties with which the commission might have to contend, but he viewed with alarm the precedent of setting up commissions which might sit in camera and ignore all established rules of evidence.

The National Expenditure Adjustment •Act, passed in 1932, effected a statutory reduction of interest and rents, generally speaking regardless of the financial position of the parties affected. No doubt the relief granted had been welcomed in many quarters. But he might point out that relief, where required, could have been obtained, at any rate as far as mortgages were concerned, nnder the provisions of the Mortgagors’ Relief Act. And it was interesting to note that natural economic causes had operated to reduce interest rates in most cases below the standard set by Governmental regulation. “ It is not my intention in discussing this ' legislation to revive criticism of measures which arc now law,” Mr Barrowclough added, “ but I do fear that this far-reaching legislation, striking at the roots of commercial security, | has done much to frighten that shy bird, public confidence. Statistics show | that money is plentiful. Yet in spite ' of this fact money is not available for j industry. I fully appreciate that un- ! settled economic conditions are playing ! their part in keeping capital locked up. 1 But are there not other factors? I I think it is incontrovertible that the mortgage legislation, whether necessary j or not, has largely curtailed investment j on rural securities, thereby acting adversely to a natural adjustment of the I farmers’ difficulties. Let us be sure that I our interference with natural economic forces is necessary and exercised with caution.”