The Mortgage Corporation

Dominion, Volume 28, Issue 96, 17 January 1935, Page 11

The Mortgage Corporation

Sir,—The time is now short before members of Parliament will be asked to vote on the Mortgage Corporation Bill. One realises that the Government io making its best endeavour to give effect to the Dairy Commission’s report and recommendation for a Rural Mortgage. Corporation ; but it appears that if the scheme .is enacted far-reaching results will come into being that are, perhaps, unthought of at the moment.

t If’the reduction of interest rates to the farmers is going to be such a boon, mortgagees receiving the higher rate of interest, at present, must be making fortunes out of farmers. Yet there is no evidence that this is so. If the Mortgage Corporation is being designed to help the mortgagee and give 3J per cent, to those that are at present receiving practically no interest, then these persons will receive a gift from the bondholders, and, failing them, the State, as the interest rate will be State-guaranteed. Supposing the Bill is passed and overseas prices of primary produce suffer another decided drop, one would imagine that the position would become “as you were” again. In this case would it be necessary to set up a second mortgage corporation to refinance the first at a still lower rate of interest? Whatever happens regarding farmer and mortgagee finance, the fact remains that all these interest-reducing tactics will make it almost impossible for the average man to save sufficient during his lifetime to provide an income for his dependants should he die. These dependants would have to live mostly on capital, and when that disappeared they would become destitute and a charge on the State. In conjunction with the proposed new legislation, does the Government propose to increase widows’, old-age and similar pensions to a decent living standard? Failing this relief, the greatest beneficiaries of the Mortgage Corporation will be life insurance concerns; they will reap a harvest from breadwinners, who, in fear of disability or death, and in an endeavour to keep their wives and families' from being cared for by charitable institutions, will be compelled to load themselves up to the neck with life insurance policies!—l am, etc., G. H. WILKIN. Wellington, January 13.,'.