The Wanganui Chronicle. MONDAY, MAY 2, 1927. THE “MORTGAGE-HOLD”

Wanganui Chronicle, Volume LXXXIII, Issue 19829, 2 May 1927, Page 6

The Wanganui Chronicle. MONDAY, MAY 2, 1927. THE “MORTGAGE-HOLD”

In the course of his address in Wanganui on Friday evening, the Leader of the Opposition expounded the new land policy of the Labour Party and showed it to be a vastly different thing from the extraordinary land plank which did duty up till recently. But, as remarked before in these columns, it contains very little that is new, and gives use very little beyond what the existing land laws already provide. One of the points raised by Mr Holland, calls for attention, however. The Leader of the Opposition contrasted the position of the New Zealand farmer with that of the Irish peasant, saying that while th» latter was subject to a landlord, the New Zealander was under a “moneylord,” and he went,on to assert that the Reform Party, instead of giving the farmer the freehold, had only given him a “mortgage-hold.” From a propaganda point of view, such statements are perhaps legitimate enough. Still they put the question from one side only, and a one-sided presentation is never a fair one. On numerous occasions, people wishing to make political capital have raised the cry that the New Zealand farmer is in the grip of the money-lender, and the implication has been made that the mortgagee is some sort of criminal whose presence ought not to be tolerated. Rarely do people talking like this pause to consider that, if there were no borrowers there would be no lenders, and that, if there be something reprehensible in the mortgage system, the man who seeks a loan is just as liuch to blame as the one who makes it. Most men who borrow money on land, or on anything else, do so with their eyes open, knowing quite well what they are about. If their anticipations be not fulfilled, why should the mortgagee be saddled -with all the blame? Surely the man who borrows in excess of his ability to repay is equally censurable—that is, if censure be involved! It may also be asked why this cry should be raised in respect only of the man who lends on land, or houses, or chattels? Why not also condemn the hire purchase plan which so many people find convenient when buying furniture, or pianos, or gramophones, or sewing machines? Why not condemn power boards and municipal councils who instal electric light and gas service on the basis of payment by instalments Hire purrbase and payment by instalments are forms of mortgage and, if buying a farm on mortgage entails iniquity on the part of the mortgagee, equally wicked must it be for public bodies to practise what is practically the same thing. APPLICATION TO LAND SETTLEMENT It is a hard fact that, were it not for the mortgage system, thousands of men now on the land would never be there at all. As it is, the mortgage system has given countless opportunities to make .good to men with small capital, and often enough to men with no capital at all. Most of these men succeed fairly well; some do not. But, after all, whether they achieve success or failure, they take a business risk, just as much as does the man who goes into ordinary business and buys his stock on bills. Politicians, it may be noted, arc not given to wasting much sympathy on the business man who cannot meet his bills (another species of mortgage), but on the farmer who cannot meet his mortgage they pour it out by the tank full. The farming vote is a big thing. It would be very nice, no doubt, if the mortgagee could be done without. But, unfortunately, land cannot be bought for nothing. Neither can sheep and cows, or milking machines and agricultural machinery. If the farmer, as frequently happens, has no money to purchase these things, he must either borrow for the purpose, or buy on credit, which amounts to the same thing. His alternative is to go without. And if every farmer were to go without until he had the money in hand, it is certain there would be far fewer farmers. If every town dweller were compelled to pay rent to a landlord till he had enough money to build a house for himself, it is certain there would be fewer people acquiring their own homes. If every woman had to go without until she had saved enough to buy a sewing machine, instead of paying half-a-erown a week for it, it is certain there would be fewer sewing machines. Anti such a situation would be bad for the people, bad for the country, bad in a hundred ways. Yet all these are forms of “mortgage-hold.” THE STATE AS MORTGAGEE It may be objected, of course, that the argument is not against the mortgage system, but only against the private mortgagee, and that money-lending should be a State monopoly. It cannot be claimed, however, that the State is more generous than the private mortgagee. It exacts its payments under the same penalties, and is a very great deal more cautious in making loans. And, in any case, there would be exactly the same “mortgagehold,” even if the State were the sole money-lender. Furthermore, such a monopoly would so disastrously affect the operations of banks, insurance companies, stock and station agencies, dairy companies, and the like that it would precipitate in short order a financial crisis that would pinch every person in the country. It is not correct to say that the Reform Party is responsible for the “mortgage-hold.” The same system was in operation long before the Reform Government took office. It operates in every civilised country in the world, even in countries where Labour Governments are in power. It needs controlling and regulating, of course, and in most countries there are laws by which it is controlled and regulated. It would doubtless be a tine thing if it could be abolished, but no one has yet suggested how we can carry on without it. Suggestions to that end are invariably the same old system under another form. It can be said for the mortgage system, whether worked by the private mortgagee or by the State Advances Office, that it helps to settle the country and that it at least gives the wouldbe farmer an opportunity which he would otherwise lack. Moreover, as already said, the farmer—as well as the townsman—makes use of it with his eyes wide. open. If there is any improvement to be made in it, by all means let that be done! But to imply that, per se, it is iniquitous, and that it should be abolished, is merely to play with words. The Socialist State could not do without it any more than the capitalist State. And to seek to make political capital out of it is to appeal to prejudice rather than to understanding.