THE MORATORIUM.

Hokitika Guardian, 8 July 1924, Page 3

THE MORATORIUM.

Considerable controvei.sy is still taking place on the question of the up I. ftmg of the moratorium. A new aspect of tho position created in finance by the Mortgage Moratorium was presented by one who is nimble to discharge his own mortgages because his money is tied up (says the “New Zealand Herald"). ’I here were cases, he said, where wnltliy men were sheltering lihiml the moratorium and actually using it- as a means of bargaining. He knew ol cases whole mortgagees, owing to demands upon themselves, had given considerable discounts to men in a much stronger financial position, to secuie the cash. lie cited the instance of a man who. while .sheltering behind the moratorium for a considerable sum, purchased another block of land fur several thousands. The moratorium is (Pjlowing many men to speculate with other people's money, ft is simply legalised lotiberv.

Reminded that, a moitgagee had the light, to proceed through the Supreme Court for the discharge of a moratorium, he said that one objection was the cost and another mis the possibility that hardship could not he proved. But. while actual hardship .might not ,! e present, is there the shadow of justification why I should not get my money from a man who could buy and -ell me fifty times over? I have bad repeated (bailees of making highly profitable deals since the expiry date of these mortgages, but I have not had the ready cash necessary. The ready cash is in the other fellow’s hands, and I have no doubt they are keeping it busy. But there is ground for further grievance. T am hound to pay income tax on the inteiest of these legally extended mortgages, hut if I could call them up f would invest the money in land and escape income tax upon what it earns, the only extra charge being land tax. By extending the moratorium the Government has acted the role of a highwayman who makes me ‘.stand and deliver’, my pearis so that lie may hang them round an already bejewelled neck. The injustice of the thing is beyond words. “It is now proposed that the moratorium legislation should he amended so that a lender can recover hi.s money unless the borrower initiates Court proceedings to prove his inability to pay. Under such an amendment I will null uosLionably recover my money because the lsirrowers/aro so financial that their signatures would be honoured by any hank : hut it " ill not have the same effect in every case. Take, for instance. the man who by virtue of money held under the moratorium has just been able to carry one. He is not likely to be able to offer the margin now required, and therefore he may not lie able to refinance to tho same extent. Instead of deciding to cut his losses, which common sense indicates is the right tiling to do, lie may linger on in the hope that something will 'turn up—for instance the kind of sale ho may picture in his brightest dreams -and so retain his hold upon mortgage money, long overdue in tho normal course. Of course many have lost the right to j’rotection through default in their payments, and the situation is very complex. “There is one point, however that the minority who desire the continuation of the moratorium should re member, and that is that very lew mortgagees want to take possession of the farms, and I am certain that its termination would he marked by compromises and not bv bankruptcies where the securities are unsound. I believe, however, that the hulk of the money protected by the moratorium is guaranteed by adequate securities. Lending institutions have made it clear that few of their mortgages would he disturbed. I, however, am one of those who urgently requi-e their money to discharge their own obligations, but until the law is altered or abolished arc at the mercy of speculators.”