RELIEF FOR THE FARMER

Taranaki Daily News, 29 March 1932, Page 9

RELIEF FOR THE FARMER

MORTGAGE ACT EFFECTS “ .*. . I INSUFFICIENCY OF NEW MEASURE. MEMBER. VOICES GRAVE DOUBTS. A comparison between a jellyfish and the Mortgagors’ and Tenants’ Relief Bill was drawn by Mr. W. J. Polson (Stratford) in the House of Representatives last week. Mr. Polson was urging the need for improvement in the condition of the farmers and remarked that if they made the farmer prosperous they would set the wheels of industry turning- ... “The Bill will not do that,” interjected a member. ‘‘l admit that freely,’ Mr. Polson replied. “I was more than interested in the able speech which the Minister of Finance made in elaboration of this Bill, but I wondered, when listening to him, if ho had been down to the seashore and studied the marine landscape and modelled his measure on the jellyfish —a patch of protoplasm without working parts. One wonders what function it fulfils in life. One wonders also what function this Bill will fulfil;. I have been trying to find- what working parts it "possesses that will do more than the Act already in existence. How will it keep the farmer on the land? And is not the main' object of our legislation to get the farmer on the land and keep him there? Should not our legislation be designed for the sole purpose of enabling the farmer to carry .on —to keep our primary industry going in this country?* That is the whole object of the legislation, or it would not be brought before us. PROVISIONS OF THE BILL. “Thia measure does go a little further in making it possible for the mortgagor to approach, the Court directly for relief instead of indirectly through the adjustment commissioners. There is another provision, also, in connection with the personal covenant, but we know the conservatism of the Supreme Court in this country. We know that the powers given by the previous Act have not produced very much effect, and that. in nearly every case a mortgagor applying to the Court for relief has had his application refused, and I am /inclined- to think that precious little assistance will come to mortgagors from the amendment of the. personal covenant • under this Bill, if the matter is left entirely in the hands of the Supreme Court. The farmer must be encouraged to work. Everything’ depends on the farmer keeping at his work, but he .will not go on working without any hope of reward, and in the case of 80 per cent of our farmers there is no reward for them. “The situation is too critical to be toyed with, or to warrant timid, faltering steps, taken one at a time. We have to go the whole distance to save the situation, and I cannot help saying that the great necessity is to affirm the principle that the farmer must be kept upon his farm at all costs, and then to devise the. necessary .means to see that he stays This Bill does not go far enougltoio. keep the farmer on his farm. The temporary remission of rent is totally insufficient to keep men on their farms on -anything other than the best land : of this Country. A frugal man, who has very little- indebtedness, may carry on upon first-class land, but that is only a small ’ proportion of the land we farm." In the‘case, of s cond and third-class' land, ? with wool at 2d and 3d per lb..and-fat sheep down to 10s or Us, it is quite impossible-unless their ' costs are reduced very much -indeed.

“RELIEF NOTjEXTENpED.” “This Bill does certainlygive relief to all mortgagors, similar. to. -the relief formerly reserved to farmers alone, but it does not extend, that relief. The relief is no greater under the- new Bill thau. it was ■under the Old ‘Act, except that the mortgagor can- go direct to the Court, instead of to ; th© . assessment board, and that under very Ispecial conditions it may be dimly possible that some particular case of .very special hardship may get relief from the personal covenant if. the Court thinks fit. Under the State -advances system the back country. farmer : has been, and is, in a hopeless position. The -Stat- advances cannot assist him; the law did not allow it to assist , him by making reductions of rent or remissions of any kind. " ‘The State Advances Office, knowing that it cannot get anyone else to take on the proposition, has allowed -interest arrears to accumulate. These interest arrears are piling up, and indeed they are now formidable, and it is quite useless remitting a portion of them. What is needed is a very substantial reduction of the debt which the farmer is confronted with if he is to be encouraged to proceed. Not only do the arrears pile up, but the penal rate has been piling up along with the arrears, and tlie position the farmer who has got behind has got into is such a hopeless one that in many cases he has ceased to make any effort at all, knowing it is useless, and in many cases the State Advances Office has sold up the settler. “Many sections have already gone back sc i. uch that they are unfit for further farming operations, all because the State advances had dispossessed a man rather than meet him, and no one else has taken up the section. What then is the use of talking about the assistance the State Advances has given to settlers? Th'e State Advances Office is not to blame, because it has been bound by the law. The law has provided that this is the plan it 'must work under, and the result has been distress in hundreds of cases- that have come under my own observation in Taranaki. Had the unfortunate mortgagor been given the substantial reductions that were necessary, he would still have been on his farm doing his best knowing that -his obstacle had been reduced, and that some day, if prices recovered, he might possibly climb over it. “I recognise that arbitrary and' com? pulsory interest reductions, without reference to the merits of each case, might be most unfair, and, indeed, would be unworkable. But I have said over and over again that the court and the commissioner should have power to tackle not only reductions in interest but reductions in principal as well; because the trouble is not now, but will come when the period of reconstruction begins, when things commence to get a little better; when a mortgagee, realising that his opportunity has arrived, that this legislation is only temporary, and that the principal piled up still is there, will step in and take back froffi the farmer the land that has been saved for him during this long- period -of depression. I know of one particular case in my own district, in which ’th; land was purchased at £7O per acre. The farmer has actually paid off £4O per acre, and has done £2O worth of improvements per acre, and the mortgagee makes no secret of the fact that he.is now waiting ta secure that property to settle his own son r -, when at the conclusion of the Act’s protection the opportunity arises. This Act is not going on for all time. When things get better the Act will be lifted and the opportunity will then arise,-and this man who

has put his life’s work and savings into this farm, will have to hand it back because he will not be able to meet that principal repayment. “I. say that principal reductions are as necessary as interest reductions, and' that it is the duty of the Government—if it is as anxious to protect the farmer as .it says it .is, and I believe the. Gov- , ernment is quite sincere’ about it—to consider the whole question of principal reductions as well as interest reductions. ' • '

“The policy of the commissioners ia regard to the consideration to be given to second and subsequent mortgagees is not referred to at all in this Bill. What is to be the policy of the commissioners? Are they going to have a definite policy, or is every board of commissioners to be a law unto itself ? Is one set of commissioners going to say, ‘We will allow 50 per cent, to the first mortgagee, 25-per cent., to the second, and 10 per cent, to the third,’ and another set to say, ‘We will wipe out the second and third mortgagees and. make Um first mortgagee the only man to get consideration’? .They certainly have power to make recommendations. They will be accepted by the • court. That is what ■ the commissions are there for —to make recommendations for the court to adopt. No court will apt in .defiance of the recommendation of the commissioners. That is a matter which, in my opinion, should be settled by Act, because we are going to have vast confusion. “If the Government desires to encourage mortgages upon country lands there is a yay that it can do it. It wculd be possible to popularise mortgag-i upon country lands if the Government had. the courage to tackle the plan. It is not my own idea. It»is the idea’of a prominent man in Taranaki, who has been giving some consideration to this question, and I put it forward here. If the Government would say that where money was lent upon country securities at a low . rate of interest, say 5 per cent., such mortgages should be tax-free, and that for every half per cent, increased interest an increased tax should i. placed upon the security, I am satisfied that it would help to swing more over to country lands, to make conn’ ” lands more popular, and it would do a great deal to prevent the over-spending in the cities that is at present in evidence. I welcome the Bill as a step forward, but . I am sorry it has not been a longer step.”