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Poverty Bay Herald, Volume LXII, Issue 18632, 16 February 1935, Page 5

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MORTGAGE CORPORATION OPPOSITION TO BILL FARMERS DISSATISFIED I Parliamentary .Reporter.) WELLINGTON, this day. There are already indications that the Rt. Hon. J. G. Coates may have to fight hard for some of the clauses of the Mortgage Corporation Bill when it reaches the committee stage in the House. ( _______ The second reading debate, which was opened by Mr. Coates on Thursday night, was continued yesterday, when Mr. M. J. Savage entered the lists. He claimed that the Government s proposals were inadequate to deal with the plight of the farmer, contending that the problem could be solved by a readjustment of mortgages under State control and guaranteed prices for products and services which would enable producers to meet their obligations on a new basis.

Another speech followed with interest was that of Mr. W. J. Poison, who stressed his opposition to shareholder capital, and pressed for a co-operative plan controlled wholly by the State. He said that he would oppose certain clauses of the hill during the committee proceedings. ■The debate was interrupted by M |e adjournment at 5.30 p.m* when the House rose until Tuesday. Mr. W. Nash (Labor, Hutt) urged that the State Advances Department should be given power to accept money on deposit. It would then be able to do all the Mortgage Corporation could do. The Minister had • stated that the j corporation' was not to be run for profit, * but where was the dividend or interest on the share capital to come from? He agreed that there was need for a readjustment of mortgages, but held that a corporation containing private capital would not operate in the best interests of the people of the Dominion. FARMERS’ OBJECTIONS Mr. W. J. Poison (Coal., Stratford) said he was-not satisfied with the proposals before the House. Farmers could not pay the rate of interest they had been faced with in recent years. The most urgent thing they had to consider was what interest reduction and principal readjustment they were going to be given in the next few months. The corporation would dictate the interest rates if it succeeded, and the farmer had a definite need to know what the corporation meant. The corporation would also largely decide the value of the land in the Dominion. The fanner was asking whv the Government would not rid him of the financial domination under which he had suffered for years. The farmer wanted to see the corporation managed by those who would keep the interest down, and not raise it. The bill, he said, would mean the end of the cooperative financial system at present operating.- The fact that the State had a majority on the directorate did not give him any confidence in the slogan, “service before profit.” There might be a repetition of the Bank of New Zealand, where the State had four out of six directors. He contended that the corporation should he managed by an independent board. He was con- / vinced that the maximum interest the farmer could pay was per cent. He contended that the Rural Intermediate Credit Association should have been widened instead of being absorbed into the corporation. He wondered how those who objected to shareholders in the Reserve Bank would view shareholders in that corporation. DANGEROUS EXPERIMENT Mr. H. T. Armstrong (Labor, Christchurch E.) said it was not only with the actual rate of interest they had to deal, but some of the mortgages had to be written off. The bill gave security to the money-lender, but reduced the farmer to serfdom. He thought the experiment was a very dangerous one, and one to which he did not like to be a party. He contended that before any Teform giving relief to the farmer was successful, it would be necessary for the Government to take control of the monetary system. The people who controlled the monetary system controlled the prices of produce, and it was the low price of his products that had brought the farmer to the position he was in to-dav. , . Mr. W. J. Broadfoot (Coal., Waikato), claimed that the interest rates had been held at too high a rate for 20 years, and any means that could be put" into operation to reduce the rate 'of interest were steps in the right | direction. He thought it would be possible for the corporation to pin the rate down to 3£ or 4 per cent. He claimed that Jong-term finance was necessary to carry on farming successfully, and welcomed the extension of the term to 50 years. «,