RADICAL PROPOSALS.

Thames Star, Volume LXV, Issue 19374, 3 April 1935, Page 3

RADICAL PROPOSALS.

THE ADJUSTMENT BILL Compensation To Mortgagors RUSH LEGISLATION. CHAMBER OF COMMERCE VIEW. Public opinion; has reached consternation point at the unconstitutional manner in which the Rural Mortgagors Final Adjustment Bill was dealt with by the House of Representatives (says a statement by the Associated Chambers of Commerce of New Zealand). The Bill was given its second reading, and then accorded urgency, before vital amendments to the measure were brought down, and which amendments were not known to the general public until they had been passed by the House.

It is true that the confiscatory "20 per cent, equity clause" was struck out, this action leading to the introduction of amendments, but the wholesale manner in which pages of amendmens were put through, before the public was informed of their nature, did not admit of the question of representations being received by the Government. The amendments, which open up further questions of the greatest importance, constitute practically another Bill in themselves, embodying, as they do, hew proposals which are most radical and far-reaching. When there was withdrawn from the Bill the provision that would give back to an insolvent mortgagor a share of up to 20 per cent, of what was actually the property of his creditors —a most prodigal contrast witb the £SO limit of property allowed any other bankrupt —it was generally expected that the plain injustico of the proposal, with its indefensible discrimination against one class of the community (the farmer's creditors) had been recognised. Instead of that, the substituted amendment relating to the compensation to bo paid the mortgagor is merely a twin sister to the original, in different raiment.

Under this new provision, mortgagees —who have already sacrificed interest payments to help mortgagors —are required to provide insolvent mortgagors with a home and a job for five years. Produce prices, payments of interest, the losing of the means of earning a living—no anxieties such as these are to be thu lot of the mortgagor for five years, In short, he is given a security no!; enjoyed by many mortgagees. At the end of the five years, if he does not choose to carry on, he walks oft the property freed of his obligations under any mortgage of the property, "including any obligation under any personal covenant" —an abrogation of contract without parallel in any British country, which may well mean that in some cases wealthy people will be freed of liability. Not only this, but the mortgagee must pay to the mortgagor an amount of compensation to be fixed by the Court of Review. If, at the end of the five years, the mortgagor, is willing to continue, but the Court of Review declares that he is not entitled to continue, he is still to be paid compensation by the mortgagee.

"Wors'j Repudiation."

These are the plain "facts of tho new provisions of the Bill. As one commentator has' aptly remarked, ''the mortgagee ' ! is to be forced, against his will, to keep his mortgagor on the farm and then to pay him later on for having stayed. Tho mortgagee is to take the loss on aV. this if things go badly, and tinmortgagor is to take the profit ii! things go well." Whatever arguments may by brought for giving something to tho rural mortgagor,' there can be no justification for penalising one section of the community in this manner. The responsibility—if there is a responsibility—belongs to the Crown. By contrast with the attitude of the New Zealand House of Representatives, it A\*as stated in tho Legislative Assembly of New South Wales recently, when the position of the farmer was being considered, that "we must stand up to the man who has extended accommodation, Not to do that would be the worst kind of repudiation."

In the case of mortgagees of small means and with heavy obligations, where are they going to find tho cash to pay the compensation? Mortgages in some cases represent life savings, and the sole means of livelihood, while it is by no means uncommon for a mortgage advanco to be representative of scores of small investors.

What amount of "compensation" is to be fixed by the Court, which in given no guide whatever? If payment for the five years is to be mado on the basis of £2 per week, then this would be sufficient in some

cases to wipe out a mortgage,

And why should this compensation be paid? Mortgagors and their families will have been living for years on properties at the expense of mortgagees who themselves, in some cases, may have had insufficient on which to live. The destruction of confidence in rural lending which the Bill will bring about will follow

the visitation of hardship on many mortgagees.

The Legislative Council has had more time to consider the full import of these latest provisions than the House of Representatives gave itself in the rush of dealing with sheaves of amendments. In the matter of the present Bill, it is only to the Legislative Council that the general public can hoav look for just and equitable legislation.