MORTGAGES AND RATES OF INTEREST

Dominion, Volume 11, Issue 176, 15 April 1918, Page 6

MORTGAGES AND RATES OF INTEREST

WIDENING THE MORATORIUM The Minister introduced a new clause amending tlio Mortgages Extension Act. The clause provided that covenants or agreements contracting parties out of the provisions of the moratorium law should 110 longer have any effect. Sir Joseph Ward said the position under the existing lawwas that borrowers could contract themselves out of the moratorium law. People had been doing this very extensively. They had been forced to do so by lenders,' and some of the persons who had been making borrowers contract out of the moratorium had been pushing up rates of interest. The clause made it. ciear that the moratorium applied to all mortgages and advances, regardless of any contract that might have been entered into by the borrower. The Government was goins to regulate the rate of interest, which would not be allowed to exceed C per cent, while the war was on. Members: On sloelt? Sir Joseph AVard: "T am talking of rates of interest 011 mortgage or by way of advance." The regulation had been carefully drawn up, but he would not discuss it piecemeal at that stage. The determination of the Government was to keep the rates of interest at a reasonable level. People were not going to be al-| lowed to send money out of the country for investment. Some investors had been doing this, and the practice;was to bo stopped. Mr. Parr said the remarks of the Minister had considerable weight—as they applied to future mortgages. But there were many existing mortgages. AY as it really necessary to affect existing contracts? Sir Joseph Ward: We are not interfering with existing contracts any more than we did in 1!) M by means of the Moratorium Act. Mr. Parr said the 191-1 Act had been a war measure. The proposal now was to invalidate contracts made under the Moratorium Act. He was not sure that this was fair tr necessary. Mr. Harris -.xpressed a fear that the clause would make it difficult to borrow money. A higher rate of interest than the Minister had mentioned was reasonable in manv cases. Mr. AVilkiiison argued that the provision would make it difficult for settlers and persons with poor security to borrow money at all. The clause was adopted. Unregistered Mortgages. Annth-r new clar.se introduced by the Minister provided that the ilinjster of Finance should have power to give validity to an unregistered mortgage in cases where rcgistTeti'Mi would be unfair or unreasonable in view-of war condi-'i-i'is "e s. : r' !!'r 11:11 was rendered by the shortage of shipping and Hie payment of advances of produce in store. ! T',l! vlaii'-.e was -i.i'-v'.ed. I The Bill was iepo..cd with amend- | ments. Mr. Al'Oombs and Mr. Payne ] spoke 011 the lliin' leading, and the Bill w;>; passed at 10.G p.m. | EXPIRING LAWS. !»• Kr.rrhg Lar< Cn.iniiance Bill! was r;-;nl :i s l . i-ond time, and put through 1 its rei:.a/.:iiig without debate. LOCAL BILLS. The following local Bills were introduced and read a first time:—Tauranga Borough Council and Tauranga Harbour Board Empowering Bill (Mr. Horries), Uawa County Bill (Mr. Mac Donald),

Maori War Meda Bill (Mr. Wrw t). Invercargill Borough Council Special Hale Empowering Bi (Mr. Han )• The House adjourned at 10.20 until n a.m. to-day.