RURAL FINANCE

Evening Post, Volume CXVI, Issue 102, 27 October 1933, Page 5

RURAL FINANCE

RELIEF FOR FARMER

MORTGAGOR LEGISLATION

REPORT BY COMMITTEE

Important recommendations, suggest* ing various amendments to the mortgagors' relief legislation, wero brought down by a special committee appointed by the annual conference at today's sitting of the Dominion executive of the New Zealand Farmers' Union. The committee comprised Messrs. W, J. Poison, M.P., W. W. Mulholland, H. O. Mellsop, and F. Waite. THE REPORT. The report, after amendment, read, as. follows:— 1. Power to Bring Stock Firms into Pooling Schemes.—That in order to make possible an equitable pooling arrangement between all parties the Act be amended to give the Commissions and the Courts power to bind tho holders of chattel securities as well as the land mortgagee and the mortgagor. 2. Material Alterations to bo Re-sub-mitted to Commissions.—That the Act be amended to ensure that when tho Court is disposed to vary materially tho recommendations made by an Adjustment Commission no such material alteration shall be made in the conditions on which relief is granted until the variations are referred back to tho Adjustment Commission for further re* port. . 3. Power to Reduce Capital.—That legislation be enacted enabling tho various mortgagors' relief commissions to recommend reductions in the principal of vendor mortgages in addition to those of interest when considered advisable and reasonable. 4. Restrictions After Legislation Expires.—When prices rise and the period of reconstruction comes, provision be made protecting those holding farm lands from unreasonable realisation. To that end we urge that for a period after the lapse of the relief legislation, mortgagees should be restrained from realising on the securities held, providing the mortgagor waa paying current interest. 5. Personal Covenant.—That when a property has been transferred from the original mortgagor for a period of more than two years, and the mortgagee 'has acquiesced in the transfer by not raising any objection to the transfer in that period, tho personal liability of the original mortgagor shall bo regarded as being1 also transferred to tho transferee. 6. Readjustment of Farm Mortgages. —That it is in the interests of all parties that a definite interest in his land should be secured to the. mortgagor. It is also most desirablo that the present insecure tenure of many; farmers should at the earliest moment be replaced by a secure tenure, it is urgent that a scheme of refinance of farm mortgages which shall secure to both the mortgagor and mortgagee their property rights should be inaugurated. 7. Schemes of Wilkinson and\ Fletcher.—That these schemes entail many; undesirable consequences and we cannot recommend them to this executive. The Smith proposal is probably too cumbersome for general adoption and cases vary too much to allow ot any set rules to be rigidly applied. 8. Government Lending Departments and the Public Trust.—Government lending departments should set an example in initiating and carrying out methods of refinance which will place both themselves and their mortgagors on a permanent and secure footing. In order to enable this to proceed mv* mediately—which is urgent—wo suggest that either a definite proportion Df the net proceeds bo allocated to each, party as a permanent arrangement or that a rental value be assessed from time to time and be accepted as interest up to the full amount thereof. The addition of a small amount of principal repayment to be made as soon as possible and a per-, manent assessment of tho capital liability not to exceed' tho capitalised yearly earning capacity or'rental valua be made within five years. Remits 1, 2, and 3, it was pointed out, were suggested as urgent amendments to the present Acts which should be consolidated and.extended before tho expiry of the present legislation on December 31. The remaining clauses dealt mainly with the desire of the;' union to have some comprehensive* scheme for the reconstruction period. The executive believed that some con* structive scheme was urgently required, as many farmers are very apprehensive of what might happen when the present legislation ceased. -The recommendations are to .be placed before the Hon. J. G. Cobbe by, Messrs. Poison and Waite. MORTGAGORS' ATTITUDE. Prior to the adoption o£ tho report in its amended form, Mr. W. W. Mulholland (Canterbury) • said ho wished to stress the fact mortgagors of over^mortgaged farms were losing interest in their farms, and, in fact, were becoming disheartened or hardened, according to the way tha position was looked at, and were not making anything like the effort they; might reasonably make if they had a reasonable assuranco that their efforts were going to be of any value to them. Throughout the Dominion today thousands of mortgagors felt that they wero only on their property until it became possible for tho mortgagee to realisa on it, and then they would have to gw off. A voice: Hear, hear, that is the posi* tion. s Many of these people, continued Mr* Mulholland, were doing their best t4 enjoy life in the circumstances ii* which- they found themselves, and the.^ were not bothering about tho farm. H# sympathised with Nthem. Some people said they were not playing the gamo* but he could not say that. How could men put their whole heart and soul into tho work when they had a sword, hanging by a thread over their heads, and knew that that thread was going to snap sooner or later? RECOVERY OP COUNTRY. "It is not sufficient that wo v tiiin over present difficulties," proceeded Mr. Mulholland. Merely to tide over present difficulties meant the piling up of more and more permanent debt, making tho position worse and worse, and net doing any real good. The relief legislation had given them ;* breathing space to look round and try, and find some means whereby the matter could bo more satisfactorily and permanently dealt with. If they failed' to take that opportunity the value of; all tho efforts during the past two years was gone. They must take tluv step of finding a way of permanently dealing with the situation, which, _it not permanently dealt with, was going,, to prevent tho recovery of tho country;* for years to come. ■ _• . ~ Mr. E. H. Murney (Otago) said ho. did not liko tho recommendation giv-', ing power to recommend reduction in principal. He said he thought thero would be a grave danger of serious in-, justice being done to tho mortgagees without very much benefit being given to the mortgagors. Further discussion of tho commit", tee's report clause by clause was takerin committee. . : ■ .