LABOUR’S VIEW.

Star (Christchurch), Volume LXVI, Issue 20540, 15 February 1935, Page 7

LABOUR’S VIEW.

Criticism of Mortgage Corporation. MR SAVAGE’S EIGHT POINTS. “ Star ” Parliamentary Reporter. WELLINGTON. This Day. Eight main points were made by Mr Savage in the House to-day in elaborating the Labour view of the provisions of the Mortgage Corporation of New Zealand Bill. These were:— (1) The proposals are involved. They will turn farmer mortgagors into serfs and they will take the full time attention of an army of inspectors, valuers and other State officers in their administration. (2) State lending institutions are to be superseded by a semi-private lending institution, which, without authority to issue money, must continue.to rely upon borrowing. (3) For the purposes of the Bill money must be raised upon securities of second class importance and as a consequence will carry higher rates of interest which will be passed on to borrowers. (4) Money for the purposes of State advances, always has been raised on the first class security of State revenues and the benefit has been passed on to the borrowers. (5) The weakness of the present system is due to the inability of State lending institutions to utilise by direct means the credit of the State. This is also the main fundamental weakness of the proposed National Mortgage Corporation. (6) Reduced interest charges, although desirable, will not bridge the gap between the purchasing power of the people and production and is therefore not a solution of the problems due to falling prices. (7) The solution of the problems arising out of the present mortgage system can be solved by (a) readjustment of mortgages under State control; and (b) guaranteed prices for products and services which will enable producers to meet their obligations on a new basis. (8) The Government’s proposals mean, in effect, that after a period of deflation which was deliberately undertaken a substantial portion of the equities of all parties to the mortgage contracts is to be destroyed, that is unless something turns up to raise prices. The aim should be to reestablish the equities of all concerned, including home-builders.