EARTHQUAKE LOANS

Taranaki Daily News, 30 November 1934, Page 9

EARTHQUAKE LOANS

BURDEN ON HAWKE’S BAY. DEMAND FOR RELIEF MADE. Hastings, Nov. 27. The co-operation and assistance of borrowers of earthquake rehabilitation loans in an endeavour to secure the elimination of interest and to have obligations confined only to the repayment of principal, is appealed for in a comprehensive statement by Mr. George Ebbett, Hastings, a member of the deputation which gave evidence before the Petitions Committee of Parliament when the appeal of those seeking relief from the burden of mortgages was heard. Meetings are to be held shortly at Napier, Hastings, Wairoa and Waipukurau in an effort to form an association for the purpose of strengthening the demand for relief. Mr. Ebbett said that shortly after the disaster there was a suggestion that, if an indication were given, help in the shape of a free loan or a relief fund or some other form would be forthcoming from England, and there would have been no doubt about the spontaneity of it. The Government’s policy was to minimise the loss to the utmost and discourage assistance of any kind, thereby promptly and effectively putting a stop to any attempt to get relief from England. There was tremendous wealth in England, and if, when sympathy ran at its highest, a fund had been initiated by the Lord Mayor of London and had been properly organised, Mr. Ebbett felt he was not exaggerating when he submitted that anything up to a million pounds might easily have been raised for the relief of earthquake sufferers. In settling this policy, no doubt Mr. Forbes swayed the decision, and it was

his belief that such a movement would prejudice New Zealand securities in England. There, was ample evidence that in the absence of any relief fund New Zealand securities depreciated drastically for several weeks. There was no reason to suppose that if there had been a relief fund the securities would never have staunk by one point . more than they. did. _ This matter was touched' very lightly in the petition. - - . ■ ■ Mr. Forbes and Mr. Coates and others visited the earthquake area. No cne wanted to say they used the words ‘ we promise,” but they , made published statements conveying clearly .that the Government viewed this as a national disaster, that it would, be dealt with from that point of view and that very substantial and generous assistance would be provided, : Virtually these were promises and . could be construed as nothing else. - The Earthquake Act then became law. It provided a sum of £1,250,000 to render assistance to persons who had _ suffered loss by the earthquake and provided further for the transfer of £250,000 to the State Advances Department for loans to local authorities, leaving the £1,250,000 for private distribution. It also provided for the constitution of a committee to distribute this money by recommendation to the Minister left either by grant or loan in their discretion. Here again Ministers and others without exception indicated the clear intention to help these sufferers liberally, and their attitude was unanimously endorsed. No one dreamed that more than 96 per cent, of the money distributed was to be lent upon terms and conditions which in many cases were unconscionable, and were to-day causing worry and suffering to many harassed , and struggling people. Mr. Coates’ hypothetical guess of £375,000 for grants dwindled to £34,000. His interest of 1 per cent., and then 2 per cent, and then 3 per cent., started off at 5 per cent., and 4J per cent. Nbw he agreed to reduce it. to 4 times and 3J times as great as he then had in his

mind as something fair. The SL2SWMO for private assistance, which everybody agreed was inadequate, and which if tha right thing had been done was. cf course, totally inadequate, was found by the Rehabilitation Committee to be about £350,000 too much, said Mr. Ebbett. The so-called rehabilitation of every single mortgagor, that was,, those to whom more than 96 per cent, of the money used was lent, consisted of a loan, every shilling of which must be repaid. The very maximum, assistance granted, to any one of them from, this fund was the loan of it for a year er two years, and in some cases of extreme hardship for a longer period without interest, and thereafter at 5 per cent, and 41 per cent., and. even row with the proposed reduction at a rate higher than the money would have been, earning had it been left where it was.