ASSISTING THE FARMER

Taranaki Daily News, 6 March 1931, Page 10

ASSISTING THE FARMER

adjustment of mortgages arbitration plan advocated. 1 FINAL JUDICIAL AUTHORITY. ' 1 Support for the establishment of judicial bodies to deal with disputes between mortgagees and mortgagors was given by the South Taranaki executive of the Farmers’ Union yesterday. After some discussion proposals forwarded by the Eltham branch to the last meeting were withdrawn and a resolution passed by the union’s economic committee was endorsed with an alteration widening its application to embrace not only renewals of mortgages, but also difficulties under current mortgages. Mr. J. Cocker reported that the committee set up to consider the Eltham resolutions had not had time to meet. Continuing, Mr. Cocker said he had recently heard of another case of hardship. A man had bought a 78-acre farm for £l2O per acre, had paid £5OOO and had spent over £lOOO on improvements. He had increased the production from 10,0001 b. of butterfat per annum to nearly 17,0001 b. The mortgagee holding a mortgage for the balance of the purchase money had since bought another farm and wished to call up part of the mortgage, which the mortgagor was not able to raise. The question had been referred to the Commissioner of Crown Lands, who had replied that if the mortgagee would not ■ agree to negotiate nothing could be done. What was the good, Mr. Cocker asked, of the commissioner being appointed? He could only act as a mediator. Mr. Cocker then quoted portions of the Daily News editorial comment on the South Taranaki land charge adjustment scheme. It seemed to him that there was a necessity for the com.mittee to have legal powers. There were six men in Eltham who were in difficulties, including one who had. been on his farm for 15 years. He knew the proposals were revolutionary. In previous times capital had been looked on as a sacred thing. In fact, he had thought so himself, but cases of hardship had changed his opinion. A farmer’s farm was his bank, and he put all his money into improvements. If he had laid his surplus by he would be better off. Mr. Cocker then moved the Eltham resolutions.

Mr. W. E. Carter stated that in the case cited by Mr. Cocker the mortgagee had purchased another farm and he might be in difficulties if he let the mortgagor off. The whole circle would have to be adjusted. The Eltham resolutions were: —“That this meeting, having considered the present economic position, is of opinion that a readjustment of mortgages, interests, rents and wages is necessary as from a date to be selected by the Government not later than March 31. The Government, should set up a competent board in each district to classify mortgages and introduce legislation to deal with the classification, which should be' in three categories: (a) Mortgages that'will bear interest on average production and current, prices after allowing for reasonable working expenses; (b) mortgages that will bear interest on average prbdu’etion and prices after allowing for reasonable working expenses; (c) mortgages that will not bear interest on. average production, and normal prices after allowing for reasonable working expenses.” FINANCIAL TIMES’ OPINION.

Mr. E. K. Cameron, secretary, read the following extract from the New Zealand Financial Times:—-“It would be a blunder of the first magnitude to let the Government mix up in what is after all a private, contract between mortgagor and mortgagee, both having entered into the contract with their eyes open. The mortgagor has had the advice and help of the mortgage-procurator, and the mortgagee has had the advice of the land valuer. If the mortgagee has been fool enough to succumb to the optimism of the land valuer and lend more than the land was worth, he should be made to pay for his mistake. The mortgagor and mortgagee are best left to themselves to settle difficulties. Some few mortgagees may be harsh, but the majority will be glad to forego interest to save the principal. A good deal has already been done in that respect. This is very much of an economic problem, and the intervention of the Government would be to inject politics into the problem, and the two will not mix. Farmers are always calling out for cheap money, and the cry has been heard for the past 40 or 60 years. At one period of our history we had a number of land companies 1 operating here. They were more or less trust companies, and their method of operation was to obtain deposits in. Britain and lend the money to farmers and others in New Zealand. In this way a great deal of foreign private capital was introduced into the country.” The Dominion executive forwarded the following resolution carried by the economic committee: “That in order to afford opportunities for relief in cases of hardship, rural finance adjustment boards should be set up in each land district to which farmers unable to renew their mortgages might appeal; such boards to hear the evidence of both parties and make recommepdations. In the event of such recommendations not being accepted, the board to have the power to submit the matter to some judicial authority to be set up by the Government for the purpose.” An extract from a letter by the Prime Minister to the New Zealand executive was also read, advising that in addition to the appointment of commissioners of Crown lands as adjustment commissioners it was proposed to introduce legislation setting up a judicial body to consider special cases. Mr. Cameron said the renewal was a difficulty, but most farmers were affected by their obligations under current mortgages. The trend of the economic committee’s discussion had been against State interference. AU seemed agreed that if anything was done to interfere with the rights of mortgagor and mortgagee it would work against confidence in rural securities.

By doing anything to frighten capital, said the president, Mr. E. J. Betts, the position would be made worse.

Mr. A. C. Johnstone sajd something should be done because there were many mortgages on fictitious values. Something should be done to share the Mr. Betts: I think we had better leave this alone. . £

Mr. Cocker withdrew his original motion and substituted one identical with that carried by the economic committee with tfie insertion, of a phrase covering those experiencing difficulty with their current mortgages. This motion was carried.

On the motion of Mr. H. Hodge it was decided to ask the Government for authority for commissioners of Crown lands to sit on land charges adjustment boards.