THE MORTGAGE BILL

Evening Star, Issue 22441, 11 September 1936, Page 8

THE MORTGAGE BILL

ATTACK BY MR FORBES TOO MUCH POWER GIVEN COMMISSIONS [Per United Press Association.] WELLINGTON, September 11. The House met at 10.30 a.m. The second reading debate on the Mortgagors’ and Lessees’ Rehabilitation Bill was resumed. Mr Forbes said the present measure contained most of the provisions of the old Act, but there were some notable exceptions. He defended the introduction of stay orders, as the country was passing through a very difficult period, and it was not known how long the depression would last. He referred to the Government’s policy, and said it apparently considered that there would be no more ups and downs, and that the Government’s scheme of insurance against falling prices would overcome all difficulties. But how long could the country stand up to it? How long could the country stand the present expenditure and keep its finances in a healthy position. He had spoken to many farmers who welcomed the stay orders, as they relieved them of their worries, and it was not a burden on,the farmer, nor was it a distasteful thing.- Now they were returning to the system of sudden death, and applications for adjustment of mortgages had to be in by the end of the year. When it came to the writing down of mortgages, there was bound to be a good deal of hardship, and there would be much feeling of injustice. People would feel that what was theirs had been talien away from them by the Government, and he would ask that something should he done to meet cases of extreme hardship. In such a case a person’s only recourse would be to petition Parliament, and if something were done in the Bill it would save Parliament a great deal of investigation in the future. Mr Forbes thought there would be a great deal of delay in dealing with applications. A great many commissions would have to he appointed if the applications were to be dealt with as expeditiously as they should be, as business was held up. The commissions were being given greater powers than they ever mad in the past. They were given the Tight to write down capital, and that power in the past had always been reserved to the highest court in the land. When it came to writing down and destroying the value or people’s securities and investments, it should be a matter for the highest court in the land. He claimed that it was not fair to a mortgagee that advances made for farming operations, for the provision of seed, manure, stock, working expenses, or living expenses should he given priority over first mortgages. It would really mean that first mortgages became second mortgages, and that was not showing much consideration to the mortgagees. The last Government, when it came to the question of cutting down mortgages, considered that the Government should play its part, and the Mortgage Corporation was set up to assist the farmer. In the present case, he thought, the State Advances Corporation should play its part. He thought full publicity should be given in cases where mortgages were to be cut down. Mr Mason: That would kill the whole thing. ' Mr Forbes said the fact that a person. was making application to have a mortgage cut down should receive the widest publicity, so that those who had claims would have the opportunity, of having them considered. Otherwise, the House would have a crop of petitions for redress because a person whose business was affected had not received notice of the proceedings. He agreed that it was not advisable' that the proceedings before the commissions should be reported by the newspapers. Mr Nash: All names will be published in the ‘ Gazette.’ Mr Forbes considered that that was not sufficient to give the wide publicity that was necessary. , Mr Nordmeyer claimed that the present Bill was a more worthy one than its predecessor. He said no reasonable Government could have stood by and allowed the state of affairs into which they had drifted through the inactivity and ineptitude of the previous Government to go unaltered. Justification for the Bill could) be found not only in the condition of mortgagors, but also in the unfortunate position of many mortgagees. There was just as much concern for the poor mortgagee (who depended upon investments for his livelihood) on the Government side of the House as there was on the other side. The Bill represented an honest attempt to hold the balance as evenly as possible and to adjust matters as reasonably as possible between the mortgagor on the one hand and the mortgagee on the other. Mr Nordmeyer said it was not correct to say that the plight of the mortgagors was due to speculation. It was due to the fall in prices, and they could not help that. To say it was due to speculation was wholly wrong. There would) be less hardship to mortgagees under the Bill than there was under previous legislation. The purpose of the Bill was to keep the good farmers on the land, to retain them on the land as efficient producers, and to make such adjustments of their liabilities as would ensure that the liability on any property did) not exceed the value of that property. Mr Wilkinson agreed with Mr Nordmeyer that the interest rates to farmers should be kept at a low level, as that was imperative. The whole success of the Bill would depend .on the efficiency of the men selected for the commissions. The very best men should be selected, without regard to their politics, and good salaries should be paid. Ho said it seemed from the Bill that the farmer would be given a mortgage which represented 100 per cent, of the* value of his farm, but how could l any repayment be made at the end of five years? It seemed to be a continuation of mortgages, a perpetuation of a bad system. He asked the Government to see that the farmer was given some opportunity of earning same money to repay part of his debt at the end of five years. Mr Wilkinson urged the Minister to extend the time in which application should be made, say, to the end of February, as he doubted if the farmers would be able to understand the measure by the end of the year. He also asked the Government to prepare a booklet setting out the provisions of the Bill and circulate it widely. Mr Nash indicated that this would be done.

Mr Wilkinson said the present system of valuing land was wrong and should be stopped. The valuation should be based upon the productive value of the land, not upon its selling value. He congratulated the Minister on the Bill, which he thought was- a very good one. , The luncheon adjournment was taken.