PARLIAMENT

Southland Times, Issue 21660, 23 March 1932, Page 8

PARLIAMENT

MORTGAGORS’ BELIEF MR J. HARGEST SUPPORTS MEASURE BILL READ THIRD TIME (From Our Parliamentary Reporter.) Wellington/ March 22. After urgency had been obtained for the passing of the Mortgagors and Tenants Relief Bill in the House of Representatives this afternoon, the second reading debate was continued, Mr J. Hargest (Govt, Invercargill) being the first to speak. The tone of the debate was very dull and created very little interest. Criticism had been offered the Bill. Mr Hargest said, but he wished to express admiration for the measure and congratulate the Primo Minister upon having brought it down. It would be acclaimed throughout the country as a means of restoring the livelihood of many people. "I feel that our job is not to take sides,” he said, “but to bold the scales of justice fairly between all classes. We should make haste slowly. We have built up bit by bit and we must be careful how we remove what is unnecessary or the whole structure may tumble down.” The farmer, businessman and worker were all in difficulties because they had made commitments they could not meet under the altered conditions, and unless something in- the nature of what the bill proposed were done, they would be in desperate straits, indeed, before the coming winter was over. The Bill proposed to do something to relieve them and he believed that something would stop the rot which was paralysing the country. As far as the farmer was concerned, the mortgagee had been keeping him on the land and while it was important that the farmer should still be kept there, it was also important that the mortgagee should be left in a position to keep on assisting him. Capital in the farming industry had shown tremendous fluctuations during the last two years and something would have to be done to restore the used up capital. The flocks of the Dominion had declined to the extent of over 1,000,001) sheep. The number of lambs had been reduced by about three per cent. Dairy cows had increased in number, but had declined in output and this decline would have to be stopped. It would take some years for the country to recover and in the meantime a great deal would have to be expended on fertilizers and farmers would not put money into land until they had some .security of tenure and the Bill should stabilize their position. The business man was also interested in the Bill. He had built up his business by the assistance of borrowed money and because his financial burden was too great, he was being forced out of business. One had only to stroll through the business centre of Wellington to be appalled by the number of empty shops. Mr H. T. Armstrong (L., Christchurch East I: That’s reduced wages. Mr Hargest: No, it's reduced income. Business people were an important section of the community, he went on. They had had the initiative to go into business and by doing so had shown that they were amongst the most progressive in the community. The Bill would help to keep them in their shops and would also help to keep the workers in their houses. Rented Endowments. Continuing, Mr Hargest said that there was one class of farmer who would be greatly assisted by the Bill and that was the man who was renting educational or local body endowments. In the past many of these leaseholders had had to walk off their farms because it was impossible to give x them relief. There was a large area in Southland held under education endowment and many of the farmers there were paying more than twice the present economical rent for land. The Land Board had gone into the matter, but could do nothing and it was gratifying to know that they would now be able to obtain relief under the Bill. Referring to the personal covenant, Mr Hargest said the personal element must enter into all mortgages and leases, if money was to be advanced. The person who borrowed it was taken into account along with the security offered. That had applied to a great extent in past years—to such an extent that if it had not been considered, half the people at present on farms would never have been there. He had known of a case where a man went to a firm to raise money without security and when he was asked for security he held out his two hands. The money was advanced to him and he had proved'a successful farmer. The personal covenant would have to be very jealously guarded for the sake of coming generations, but at the same time it had Xo be admitted that there were people who kept on pressing unfortunate mortgagors after their equity was entirely dissipated. He had known of a case where a man had put several hundreds into property and had later lost it and the mortgagee had forced him to pay r £BO to which he had no moral right and it was cases like that with which the Bill should be concerned. Another aspect of the case had to be * considered, Mr Hargest added, and that was the fact that the mortgagee was very often in a weaker position that the mortgagor. Widows had invested their all in mortgages and they should be protected and not despoiled by the Bill. Building societies had built up their funds through contributions from small investors, and if those funds, after investment, did not give a fair return, the small investor would suffer. These people were as much entitled to consideration as the mortgagor and because of them, the Bill would have to be administered very carefully. Stock and Station Agents.,

Stock and station agents should also be treated fairly, he added, because they had done more than anyone else to keep the farmer on the land. They should be kept on their feet because the collapse of one firm would cause chaos in the ranks of the farming community. In conclusion, Mr Hargest referred to the comments of some of the previous speakers and said that it was useless to cry out about the loss of national income because that was beyond our control. Mr P. Fraser (L., Wellington Central): Was the ten per cent, reduction beyond our control? Mr Hargest promptly replied that it was because it had been made necessary by conditions overseas. The country was one big family and should be regarded as such. If the family overspent its income one month, it would not attempt to remedy the position by an orgy of spending during the following month, but that was what some Labour members were suggesting the Government should do. The present time, more than ever before, was the time when all sections of the community should work together and if they would do so, they would do a tremendous amount towards restoring the industries of the country to prosperity.

Mr R. MeKeen (L., Wellington South) said the Bill was not much of an advance on the Act. What the farmer wanted was relief and the Government had promised to give it to him but all he had received was the right to go to the Court and the Court would determine what was to be done. Mr H. G. Dickie (G., Patea) suggested that the Bill should be made retrospective to prevent people being nenalised before its provisions came into effect. The debate was continued until the tea adjournment, the members who took part supporting the Bill, although Labour members continued to argue that it should have given wider privileges. Flat Rato Reduction. Fears that a universal flat # rate cut in the rate of interest on mortgages would Jre apt to work inequitably were expressed by

the Minister of Finance, the Hon. W. Downie Stewart, during the evening. The Minister said that if a flat rate reduction were decided upon, he thought it would still be necessary to safeguard the position, as bad been done in Australia, by providing that if a mortgagee showed he would suffer more by a reduction than the mortgagor, the Court should refuse to make an order.

Mr W. E. Barnard (L., Napier) : That is perfectly fair. “If the flat rate cut is imposed, we should still keep alive the powers of the court to grant less or more according to the necessities of individual cases,” the Minister said. “I still have a preference tor individual adjustment of individual cases. Regarding both rent and interest, I still believe that if flat rate legislation is proposed, it must be interwoven with legislation such as the present, providing for the granting of more or less in accordance with the necessities of each case.”

Referring to the question of repayment of interest on the national debt, the Minister said that if the State. informed its creditors that it would reduce interest by 20 per cent, or 50 per cent., it would institute itself judge of its own case. He did not think the stage had yet been reached when the State should take to itself the right to say that it was not going to pay its debts. It might quite reasonably impose income taxation on all classes of investment incomes, as long as there was no discrimination with its own creditors as against private creditors. On the other hand, if Parliament considered it easier to make that section bear its share by a conversion loan or some other method, that was a matter for consideration. He did not think it could be disputed that if the State announced its intention of writing down interest on the public debt without any consideration of the effect of the breach of faith involved, confidence would be shaken in the country’s credit and in the avenues of investment of the life savings of the people in all ranks of society. However, the whole question would no doubt come up for consideration later in the session.

The Bill was read a second time at 1.20 a.m. In committee an amendment was accepted.on the lines indicated by Mr Stewart earlier in the evening, namely, to increase the jurisdiction of magistrates to enable them to review cases where rents amount to £4 a week. The Bill was read a third time and passed. The House rose at 1.47 a.m.