FARM MORTGAGES.

Star (Christchurch), Volume LXVI, Issue 20544, 20 February 1935, Page 13

FARM MORTGAGES.

Abolition Urged by Mr Wilkinson. BOND ISSUE ADVOCATED. “ Star ” Parliamentary Reporter. WELLINGTON, February 19. The abolition of farm mortgages was advocated in the House to-day by Mr Wilkinson (Egmont), who in describing the Mortgage Corporation of New Zealand Bill as a measure which was unnecessary, and one which would not meet the position of heavily indebted farmers, declared that the legislation, would protect the investor only and lead to a high rate of interest and restriction of lending. In the opinion of Mr Wilkinson the Government would have to go much farther than it had before it gave the required relief to the small farmer who was struggling under an impossible burden. It might be said that farmers who had borrowed money should be kept to their bond, but had not Great Britain herself some time ago not met her interest payments? “ She defaulted,” interjected Mr Langstone (Waimarino). Mr Wilkinson: That is so. Mr Coates: She could have paid in commodities. The Only Alternative. “ Large numbers of farmers are desperately in need of relief from some of their charges,” Mr Wilkinson persisted. " The only alternative is bankruptcy, and that is a cruel proceeding which must be avoided at all costs. The Government should get down to bedrock and end this impossible situation.” A member: How would yon do it? Mr Wilkinson: I would abolish farm mortgages altogether. Mr Wilkinson said the Government could take over the mortgage position and issue bonds. Direct mortgagees, he believed, woxild be prepared to j accept Government scrip for a smaller amount than was owing, and if tha.t were the case he could not see why it was necessary to raise capital to put into the Corporation. It was absolutely necessary that land values should be readjusted, and if any loss were to be borne it should be shouldered by the taxpayers. In making investments the mortgagee had taken the safe and easy way, but unfortunately the value of products had fallen and could not meet the mortgage charges. It was useless trying to maintain a heap of values that did not exist. Mortgages should be based on existing values. The effect of the Corporation, he added, Avould be to keep lending down and interest rates up. "People have asked for bread and they have got a stone,” he declared. "The Government is establishing a corporation without a soul.”