PARLIAMENT

Dominion, Volume 7, Issue 2252, 11 September 1914, Page 7

PARLIAMENT

DEFECTS IN MORTAGES BILL UNLOCKING MONEY PRIME MINISTER OPTIMISTIC. The Legislative Council met at 2.30 p.m. ' : The Onehuuga Borough Council Enabling Bill (the Hon. Major Harris) was committed, reported without amenumeiitSi read a third time, and passed. The Council rose at 2.48 p.m. THE HOUSE The.House bf Representatives sat at 7.30 p.m. The Mortgages Extension Amendment Bill was introduced by Governor's Message.

The Hon.. A.. L, HEIIDMAN. said that the Bill consisted of two clauses only—one to enable persons desiring to borrow money to, contract themselves out of the provisions of the Mortgages Extension Act, and to enable trustees to invest money on mortgage, notwithstanding tho provisions of the Act. The object of the Act already passed was. to protect mortgagors from the rapacity of mortgagees, but it. had had the effect of making people disinclined to lend money; and oh the one hand a great.-deal of money was lying uninvested, while many farmers desiring money to carry oh their ordinary 'business could .not get it. The present Bill would give- borrowers powers, if they so desired, to contract themselves out (if .the provisions of the Bill. Mr.. J. A. HANAN (Invercargill) said that the Act was not giving satisfaction. ' It should have been so drawn as to put upon -mortgagors the burden of proof that they were unable to repay principal due under a mortgago. Many mortgagors used the . Act how in force to evade payment of principal and interest when they were quite able to pay it, and in many cases mortgagees relied upon repayments to enable them to meet legal obligations undertaken by them. ; " Mr. G. W. RUSSELL (Avon) suggested" to the Minister that the Act should be ihade to apply to those mortgages in which principal and interest were repaid in instalments.. Many working men were buying houses on this plan through building, societies and otherwise, and in these times, when unemployment would be common, these meii might'not be able to keep up the payments.of principal, while they might bo able to pay their interest; Hβ would suggest to the Minister that he should make provision for tho differentiation in such payments between principal and interest, and that tie Bill should bo made to apply to the payment of principal while the war depression lasts..

Mr. E, NEWMAN (Rarigitikei) strongly approved of the Bill. One ono the encouraging features of the present crisis in New Zealand, he. said, was the absence bf "panic, arid of any undue increase in the price of money. His opinion was that it was the duty bf tlie people in New Zealand, whilst husbanding their resources, to spend within Now Zealand as much money as they could with prudence. ' Bristling with Difficulties. . The Hon. A. L. HERDMAN.said that the'principal object of the Bill was to enable money to be lent. It. was impossible . with -legislation of this kind to pass a measure which was absolutely perfeot.' , ' The -conditions ' were wholly, new, new circumstances, were constantly arising, and it "was impossible to devise a Bill that would meet every new situation -.that aroso. If the Bill passed, he hoped it would have the effect of inducing people, managing trusts, aiid other people who now had money locked i'lip in their coffers, to lend this money. He hoped that money would get easier as tie result of the clause that borpowers niay, if they choose, contract themselves out of' tho- provisions of the Act. The original object of that Act was to prevent rapacious iridividiials from taking advantage of the. extraordiiiary situation by.demanding high and usurious rates of interest from people who had to borrow money somehow or other. Since the Act had been in operation, however,' it had been found that people were unwilling to lend money, and one of the objects of the Bill had been thereby defeated. With regard to mortgages to building societies, ho would remind honourable members that sums 'of money were deposited : '.with- 'theso societies'by poor people, and it wasjust as important that interest should,- be paid to these depositors, as that mortgagors should be excused from payment of "their instalments. If building societies were divested of their lncoino from mortgages,' they could not pay interest to depositors. Ho would point out also that a man , paying interest and principal in instalments was protected under the Bill to some extent. No niortgageo could exorcise his powers of sale ni tho event of default of payment of principal or interest, without first., applying to tie Supreme Court: However, he ■ would 'give the matter consideration., the Bill Tvas Tcad a first time, and the Minister claiming urgency it was proceeded with. , A Difficult Question. In Committee, Mr. G. W. Russell (Avon) moved an amendment which would havo the effect of exempting mortgages granted by societies formed under or subject to the Building Societies Act, 1903, or members of such societies. Speaking to his proposal, Mr. Russoll said that.there should be'differentiation in the money payable tor interest and that payable as principal. The clause would protect a. number or men who might bo unfortunate m the matter of niiemployment. Mr. Russell said, also, that tho Postmaster-General should now relax the restriction which prevented people drawingmoro than £2 without seven days' notice from the Post Office, Savings Bank. The Hon. A. L. Herdinan remarked that tlo question was a very difficult one, and he suggested that the amendment slould stand over in tlo meantime. . . . Mr. Russell raised no objection, ana the proposed now clauso was not added to the Bill. . . . . The Bill was reported from Committee without amendment.

On : tho motion tliat the i meastiro should be read a third time, The Hon. R. HBATON RHODES stated that things were- now practically normal, and he had considered the question of going back to the conditions concerning tho withdrawal of Post Office deposits which had obtained before tho wa-r. Events had justified the restrictions made on withdrawing money from tho Post Office Savings Bank, and in tho past two weeks the withdrawals were heavy. .. • Mr. Massey's Optimism. The Right Hon. W. F. MASSE? (Prime Minister) said that business was getting back to normal, but there was stil , room for improvement in some directions. There scorned to bo some apprehension among a small portion of tho commercial community on account of tho establishment of the Food Commission. Ho wished, therefore, to say it was not the intention to fix a castiron rule, which would prevent a profit. If prices went up in Great Britain, the merchants here must bo allowed to make a profit—a fair profit, but notlijng in the way of exploitation of tho public would bo permitted. Mr. Massey believed that tho Bill before tho House ••would do ftood, because there was ica-

eon to believe that for tho last few weeks largo 'sums of money had been locked up. Tho moro money which went into circulation during the present crisis, the better for all concerned. The Government had done its best to provent unemployment. The people should endeavour to carry on the industries and businesses of the country to keep their hands in work. Many wore doing so, but thero wero a few exceptions. If people made up their minds to make the best of. things, and avoid excitement, New Zealand would get through tho crisis without undue. ' hardships, ana would get through better than many other countries. (Hear, hear.) Mr. RUSSELL expressed pleasure at the announcement of the PostmasterGeneral, and welcomed tho cheery outlook of the Prime Minister. The Government 'had acted wisely in bririgiiig down the amendments to the Bill. The Bill was read a third tinio, and passed. The House rose at 11.50 p.m., to sit again at 7.30 p.m. to-day. DATE OF ELECTIONS GOVERNMENT CAUCUS TOVDAY. The members of tho Government Party will meet this morning. It is understood that the principal question to be discussed is that of tho desirability or otherwise of- pOGtponing tho elections. The decision of the Government on tho question will probably be announced by the Prime Minister when the House meets on Tuesday.