FINANCE BURDEN

Poverty Bay Herald, Volume LXIV, Issue 19375, 13 July 1937, Page 13

FINANCE BURDEN

WORK OF COMMISSIONS REHABILITATION ASPECTS OUTLINE OF PRINCIPLES ADDRESS'TO ROTARY CLUB "It will be understood that the work of the commissions is by no means simple, but it is intensely interesting. The more one goes into it, the more one realises that there is a great deal to be known about farming—and that there is a great deal about farming that is not yet fully known to the men on the land themselves. The opinions of stock experts and valuers, by their very differences, show that there is wonderful scope for the improvement of farming practice in New Zealand,” stated Mr. F. R. Ball, in an address to the Gisborne Rotary Club to-day. In his capacity of chairman of the Mortgagors and Lessees’ Rehabilitation Commission for Poverty Bay, Mr. Ball was able to give his audience a convincing review of the broad principles of the Rehabilitation Act, and of the main points-upon which its practical application was based, together with an outline of the major difficulties encountered in the work of a district commission.

At the close of his address he was accorded a hearty vote of thanks, on the motion of Rotarian Thos. Adams, who complimented Rotarian Ball, on having reduced a complicated piece of legislation to its essentials for the benefit of his hearers. An Intricate Act The Mortgagors and Lessees' Rehabilitation Act, 1937, contained 38 sections and as many, If not more, sub-sections, and generally was regarded as a most difficult piece of legislation to follow, said Mr. Ball. Many of its sections were more or less formal, but others were full of interest, and it was his intention to take these as the basis for his address, since time would not allow of his going very fully into the application of the Act.

The general purposes of the Act were stated in section 2, he continued. In respect to farmers, the intention was to maintain the farmer in possession, use and occupation of his land as an efficient producer, and to adjust his liabilities so that he might carry on; in the case of a lessee, the rent must be fixed at not more than the rentable value of the land occupied; and in both instances, the commission was charged to see that all liabilities of the applicant could be reasonably met after the expenses of management and reasonable living costs had been allowed for. Applicants concerned with mortgages on toifcm houses were in the same category, except that only secured liabilities were to be considered except such unsecured debts as might have been contracted in maintaining the security, under which heading renovation costs might be included. Then there were some in-between cases, which occasioned more difficulties as a rule than either of the two types quoted previously. Over 1000 Applications

More than 1000 applications for adjustment orders under the Act had been filed in' the Gisborne district, said Mr. Ball, and while it might be thought that it was quite a simple matter to set dates for the hearings of these cases, there were many complications which had to be met. One of these arose from the appointment of a revaluation committee to deal with properties subject to Crown mortgages, and though this committee was well on the job, it still had a good deal of work to do, and this was holding up some of the applications before the commission in this district. In applying the Act, the commission had had to feel its way along unfamiliar paths, and solicitors were also somewhat in the dark at the outset. However, a meeting had been held at which certain courses had been decided on, and the solicitors undertook to bring before the commission such cases as were ready for hearing. Notices had to be sent to creditors in connection with the individual applications, said Mr. Ball, and this entailed a great deal of clerical work. No Government officer in the district was more hard-worked than the secretary of the commission, Captain Barrett, he added. Division of Applications The speaker pointed out that the first job of the commission was to decide under what heading each application should go, a simple enough matter in most instances, but not so simple when it was a case of a business man owning a farm, for instance. In such a case, all assets of the applicant, including stocks and shares, must be taken into account. Next it must be decided whether the applicant was entitled to retain possession of the property, and in this connection the commission .had to consider his past conduct and the care and management of the property and the nature of past disbursements; in a phrase, whether the applicant had played the game or not. Next it must be decided whether the applicant had too small an area, or too much land, both being contributing causes of financial embarrassment in different types of case. The commission must consider whether relief would enable the applicant to meet his remaining obligations as they came due. Dwellings and Farms In regard to applications respecting dwellings, the commission heard valuations for both sides, and acted as an umpire, with power to inspect and value the property on its own account, and to decide whether the applicant had any prospect of meeting his liabilities for the future. In respect of farm properties, the question really worked down to the carrying capacity of the land, and in this connection it had been found that valuers and stock experts differed as much as doctors in their professional opinions. The commission must determine the revenue from sales of stock, check up on what stock should be sold from a given property in any year, and in the cases of dairy herds estimate the return per cow per season. The commission’s work was eased a little by the fact that average prices for stock were laid down for it by the Government, these values being based on a 10-year average up to the end of 1935; wool values also were provided for in this schedule. Returns from pigs and other products of farm lands also had to be taken into consideration, and revenue from all other sources assessed. Allowance must be made, on the other hand, for such costs as the replacement of breeding stock, seeds and manure, freights on produce, and the wages and keep of employees.

Upkeep of Motor Vehicles Mr. Ball mentioned that the cost of shearing, dipping and crutching had been averaged by the commission at £4 5s per 100 head in Poverty Bay. The cost of upkeep of motor vehicles was a matter on which there had been much argument, and experience had shown that after allowing £7 10s for the insurance and registration of a car, a further allowance of £1 per mile of the distance of the property from town would cover the cost reasonably. This would allow for about 30 trips to town in each year.

Fencing was another expense which the commission had been able to work out a basis for, and it would surprise many, no doubt, to hear that the repair and maintenance of fences in Poverty Bay worked out at about Is 9d per annum per chain. The cost of insuring and maintaining buildings on a property, depreciation on buildings, and interest on the money invested In stock were included in allowable expenses, and one obligation of the commission was to work out the average annual value of stock over the period of occupation of the property—not an easy obligation to comply with. Alternative Forms of Relief

The basic value of the property having been reached, the commission then had to decide what adjustment would best apply. In some cases, for instance, the mortgage on the land might be written down, but a part of the value applied to the stock, thus becoming an adjustable debt. He mentioned this to indicate the extent of the powers conferred by the Act on the commission. Many cases had been filed in which individual applicants were the occupants of two or three properties. In cases where applications were for adjustment on one property, the commission could relieve that property and transfer part of the load to the other, or could order one property to be sold to reduce the total, liabilities of the applicant. Alternatively, a portion of the mortgage liability might be transferred to a man’s stock. .. , There were also cases, continued Mr. Ball, in which a man applied for relief because circumstances prevented him from clearing up his position in any other way. He might not want any benefit from the Act, but only an official basis for dealing with his affairs. The position of a guarantor was difficult to deal with, and indeed was the most difficult problem given to the commission. Many guarantors simply applied to secure protection from liabilities which they might encounter later, in the event of their not applying, such cases often arising from past deals in properly in which the guarantor has no present interest. . , . ~ “Most farmers recognise what they should be able to do with them properties.” concluded Mr. Ball, but they are dependent on finance. There is no doubt that when the railway comes to Gisborne many of our farmers will be able, through cheaper freights and accessibility to markets, to do better by their properties than they can do to-day.”