LIMITING THE RATE OF INTEREST.

Otago Witness, Issue 2690, 4 October 1905, Page 31

LIMITING THE RATE OF INTEREST.

THE LATEST GOVERNMENT

PROPOSAL.

(Fboji Our Own Correspondent.) WELLINGTON, September 28. A Government Bill to prevent excessive rates of interest has been circulated. It is provided that the* bill shall not affect the Pawnbrokers Act. Tlie act shall applyto every contract made after the commencement 'of the act for the loan of money. Other clauses are as follows: — " Except whore the rate of interest ia agreed upon in writing, and signed by ths party to be charged therewith, the party entitled to interest under any contract shall not be allowed to recover, or receive, or enforce payment of interest at a higher rate than £6 per centum per annum, calculated on the principal sum actually lent and from time to time unpaid. (1) The maximum rate of interest payable, recoverable, or enforceable under any contract shall not exceed — (a) £6- per centum pec annum where the security, wholly or partly, consists of land; (b) £8 per centum per annum where the security consists of stock within the moaning of ' The Chattels Transfer Act, 1889'; and (c) £10 per cejitum per annum -where the security consists of any chattels (other than stock) within the meaning of the last-mentioned ac t — calculated in every case upon the sum actually lent and from time to time unpaid, unless, on any proceedings taken to recover such interess or enforce any security therefor, it is pro/red that any higher rate, not exceeding the rate con; tracted for in writing, is under the circumstances fair and reasonable. (2; Nothing in this section shall prejudice or affect the right which any third person would have as assignee or transferee of any contract, if he proves that he became such assignee or transferee in good faith and for valuable consideration, and without knowledge or notice of any contravention of the provisions of this act. Except as provided by the last preceding section, all contracts for the payment of interest in excess of the respective rates hereinbefore limited in that behalf shall, to the extent of the excess, be absolutely null and void. All interest paid, or all owed by or deducted from, any person in excess of the respective rates hereinbefore limited in. that behalf may, notwithstanding that he contracted therefor, or consented thereto, be recovered back by him in any court of competent jurisdiction ,(together with full costs of suit) from the person to whom lie paid or allowed the same, or by whom the same, was deducted, in like manner as if it were money had and received to his use by such last-mentioned .person, provided that no proceeding to recover back _ interest under the provisions of this section shall be commenced except wiithin six months from the time the person instituting such proceedings had knowledge or notice that the interest was paid, or allowed, or deducted, as 'aforesaid; and no person shall gjecover any interest back in any such proceeding if it is proved that the payment, allowance, or deduction was, under the circumstances, fair and. reasonable. If any person party to or bound by a contract is compelled to pay, or allow to any assignee or transferee of the contract, interest in excess, as aforesaid, he shall also ba deemed to have paid or allowed the sam« to the person by whom the loan was made, and shall have the same right to recovei such excess from him as if the payment oi allowance had been made to him direct All sums received oi; obtained" directly 03 indirectly by way of interest by any per son making a loan, or by any assignee ot transferee aforesaid upon the collection 01 in respect of the sale, disposal, or realisation of any security for the loa.n shall bo deemed to have been paid or allowed by the person liable for the loan. All loans shall bo made in current money, bank notes, 01- cheques on bankers, and shall be made in full, without any deduction for interest or otherwise: and no land, goods, or articles of any kind whatever, or things in action, shall be given or supplied in or by wa-v of barter or otherwise for, or as part of. a loan. Every contract made .or transaction entered into or performed, in breach or with intent to evade or avojd this section, shall, to the extent of such breach, evasion, or avoidance, be absolutely null and void. This section shail not apply to deductions for the current rate of discount on bills of exchange^ or promissorynotes discounted, and having, when discounted, an tmexpired currency of not more than six months. For procuring, negotiating, or obtaining any loan, it shall not be lawful for any person to charge, recover, or receive more than 5 per centum on ths amount of the principal sum actttallv lent. Such percentage shall include all foes, costs, charges, and expenses of any kind whatsoever for, or in connection with, or preliminary to, the orocuring, negotiating, or obtaining the loan. It shall not bo lawful for the lender or his partner, employer, employee, principal, or agent, 01 any person acting for or in collusion with the lender, to charge, recover, or receive any remuneration or reward whatsoever for or in connection with or preliminary to ( loan, or the procuring, negotiating, oi obtaining; thereof."

A short time ago one of the influential Maoris of the Ngatitahinga and Ngatipara died suddenly at the Warehoa settlement o£ Te Akau (writes the ' Waingaro correspondent of the Aiickland Herald. A large tangi was held, which lasted a week or more, during; which time two tons of flour, two tons of potatoes, three-quarters of % ton of .sugar, half a lon cf rice, 2000 loaves of bread, and seven bullocks, besides tea and smaller items, were consumed. These articles, excepting the beef, were bought in Auckland, in addition to the cost of which, feight, cartage, packing, etc.. hadl to be paid, amounting to considerably ovee £100. The tangi is becomiug a =erii>ua item, and many natives realise this. In the olden times it did noi, affect tlio to such an extent as it does now. for iJaa pork, potatoes, mussels, fish, an<l ijrr>bsb«j fern-root are now <mpi>ieir.eni«d by Rtrnji pcan food, vviikh. has U> bo j?ftkl to?,,