AN UNUSUAL CLAUSE

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

AN UNUSUAL CLAUSE

. 4 ADVANCES AGAINST PRODUCE UNREGISTERED MORTGAGES PROTECTED The following new clause of the Finance Bill was moved by the Minister of Finance (Sir Joseph Ward) in the House of .Representatives on Saturday night:— "Notwithstanding anything to the eon-' trary in Section 130 of the Companies Act, 1908, registration of a mortgage aa therein defined given by any company shall not be necessary to the vnlidfty of sach mortgage as against the liquidator and any creditor of the company if tho Minister of Finance notifies the mortagee that owing to .the war conditions the registration of such mortgage would bo unfair or unreasonable in the circumstances, and that such, registration is dispensed with, provided that the Minister may impose suck conditions as he thinks fit for the protection of any other creditors 'or classes of creditors, whether bv way of providing for priority over the mortgagee or otherwise. Sir Joseph" Ward said the clause was a„ very important one. There was a great shortage of shipping at Hie present time, and (he position probably would become much'worse in the near future. Large advances had been made against produce that was waiting for export from this country. The clause might be required for the protection of .the people who had made (he advances. Mortgages of the kind covered by Ilia clause would be gazetted in the ordinary courso of events. Tho clause provided that the lending institution might hold cover without gazetting it, and bo in a position of safety) if there wiw liquidation. The clause ensured that the protection remained without the registering of the mortgage. The Minister of Finance, if asked for this protection, would see that it was not going to atfect anv other creditors. Thei proposa was duo entirely to war conditions, and it had been asked for purely on tho ground of maintaining stability under conditions that existed now and might continue to exist for some time. , Jlo thought the House tinder the circum- , stances was quite justified in putting the clause on the Statute Book The clause was added; to the Bill. Sir Francis Bell mentioned in ho Legislative Council that owing to the shortage of shipping enormous advance., had "eWd to be made to owners of oducein store. Tho registration of lo mortgages would tcikl to destroy credit and so prevent companies making the advances. .