LOWER INTEREST.

Star (Christchurch), Volume XLIV, Issue 380, 23 March 1932, Page 14

LOWER INTEREST.

An Interference with Contracts. MINISTER’S WARNING. (Special to the “ Star.’’) WELLINGTON, March 22. A friendly reception for the Mortgagors and Tenants Relief Bill in the House to-day was tempered frequently with the criticism that it did not go far enough, and that members awaited the Government’s next move. Many suggested the scaling down of interest and principal, and criticised the provision that the arrangements authorised by the measure are limited to a period of two years. The Minister of Finance, the Hon W. Downie Stewart, speaking late in the debate made some references which were regarded as a warning note against too drastic interference with contracts. Nobody, he declared, could read the future, but he agreed with a previous speaker’s statement that if the burden of fixed charges was too great it was obvious that in the end the producer was the more important element, but the only reason why an effort was made to keep alive the security was the taking of the long view that he was of enormous importance. Then there was the view that saving should be encouraged, as it reacted in a thousand ways in keeping down interest rates and providing ample money for the development of the country. Everyone wished to give relief to the honest debtor where he was entitled to it, but on the other hand it was essential not to discourage the investment of savings which were of such great importance, not only to the State, but to local bodies and borrowers generally. Feeling of Security. Commenting on the remarks of a previous speaker, Mr Stewart continued “While he is quite correct in his statement that the producing interest is important, yet it is essential to keep alive an interest in investment and it is right and proper that Parliament should do so, consistent with providing the immediate relief which is imperative to the mortgagor and producer. He must know that in his own constituency there are hundreds of small investors who have placed their life’s savings in mortgages and Government bonds, and who view with alarm the effect legislation might have on securities they regarded as gilt-edged. We want to limit the term of this legislation so as not to disturb longer than necessary that feeling of security which is in the minds of working men and other sections of the community who lay aside money as security for their old age. That is the danger and difficulty about legislation of this sort. That is why we provide that relief, where absolutely necessary, should be granted, but where it is not absolutely necessary it should not be granted.”