FINANCIAL PRECAUTIONS.

Hokitika Guardian, 23 March 1921, Page 1

FINANCIAL PRECAUTIONS.

DEBATE IN HOUSE. MR MASSEY’S MEASURE. WELLINGTON, March 21 Mr Statham said that the position was most difficult, and different from the moratorium, under which a lender had some security. In case of money on call there was no security, and he saw lenders under these proposals having to stand by and see firms to which they lent money go to the wall, and they would lie deprived of legal remedy. He thought' they should have more time to consider the position. Mr M’Cofnbs said the Prime Minister had made many speeches this session calculated to create a panic. These proi posals and the Prime Minister’s speech I to-night must increase that feeling of panic. I Mr Massey by way of further explanation said that the legislation was necessary, because the ready cash of ; many firms was exhausted owing to having to meet money charges on large imports, and if called upon to pay up at once money at call, they simply would have to close their doors. Members: Is it as bad as that? j Mr Massey: Yes. They must take steps to avert that, and this legislation j was the only way by which it could | be done. *

Mr Luke strongly supported the amendment. The moratorium might have been made to apply to local body funds as well as to private mortgages 'lbis legislation must) be pressed at once to prevent a run on the funds of local bodies.

Mr Witty said the Prime Minister had been telling them the finances of the country were sound. Mr Massey: So they are.

Mr Witty, continuing, said lie. had struck a different note by this legislation. It penalised companies by compelling them to pay an extra 1 per cent while they could unload on to a man to whom they sold stock, and stock was down.

Mr Forbes admitted that, having started this legislation, they would have to see it through. At the same time. they should see that the banks treated people fairly through the crisis. He also would like to feel assured that the Government had had the advice of the best financiers in taking the step involved in this legislation.

M. Massey said that, without disclosing confidences, he had consulted the best financial minds within reach ot Parliament Buildings.

Mr Glenn favoured lenders being paid the current rate of interest in case of extension of the date of call.

Mr M’Nicol said that the funds of patriotic societies should be amply piotccted.

Messrs Sidey, Masters and M’tallum supported the Government proposals.

Mr Massey, discussing the rate of interest payable by companies extending the date of call, said the amendment stated that the rate of interest must be “not less” than 1 per cent. He was advised by the Attorney-General that whether or not it should be more than 1 per cent would be determined by the Judge. Mr Mitchell said that mercantile firms were calling up accounts. It those accounts could not be paid they were increasing interest on overdrafts to 7J per cent. If the House was protecting firms by these proposals, it should also prevent them being unfair to clients.

Ml Howard suggested the adjournment of the debate to enable members to confer together.

M r Massey thought all now understood the situation and the proposals, and without wishing to stifle debate, be hoped they would conclude the discussion ns speedily as possible. The discussion was continued by Messrs*Atmore, Malcolm and Holland, and after Mr Massey had replied, the amendments were agreed to on the voices.