THE MORATORIUM.

Hokitika Guardian, 4 February 1925, Page 1

THE MORATORIUM.

SIR. HAROLD BEAUCHAMP'S OPINIONS. WELLINGTON, February 2. Some pointed remarks on the Mortgages Extension Act were made by Sir Harold Beauchamp, chairman of the Equitable Building and Investment Company, to-day. “I have on several occasions expressed my opinions with 'respect to the moratorium and consistently urged its early extinction,” lie said. “Parliament, however, saw fit to prolong the agony and passed the Mortgages Final •Extension Act, 1924, the effect ot which, according to Mr Justice Herdman, is to deprive a mortgagee who holds a mortgage which is subject to the provisions of that legislation of the most effective remedy that lie had against a defaulting mortgagor during the period commencing October 24, 1924, and ending March 31, 1925. Before tlic passing of the legislation a mortgagee could obtain some relief in a proper case by making application to the Court for leave to demand payment of principal moneys secured by mortgage or to exercise power of sale. That right now lias been taken from liim for the period mentioned, and the mortgagee is now almost impotent. In. face of this can there he any wonder that many lending institutions are avoiding mortgage business? When one party to n contract is deprived of his rights by Act of Parliament confidence is lost and people will naturally conclude that if it can lie done once it can be done a second time, and if it can he done by one Government it can be by another.

“The vicious precedent is there all the time. The monetary conditions of the Dominion in 1924 were of such a character that ail extension of the moratorium was not warranted. Money was in ample supply and borrowers who were able to offer a reasonable margin of security had no difficulty in arranging for mortgages at rates ranging from (i to 7 per cent. Those who had mortgaged their securities up to the full value of land purchased at in--11 ated values arc the ones who have been unable to arrange their finance, and it is these men whom mortgagees have been forced to carry, which is not fair to the mortgagee and far from beneficial to the community as a whole. With the high prices now ruling for wool and our other primary products monetary conditions should continue favourable and borrowers should experience very little difficulty in obtaining loans on mortgage, provided, of course, that borrowers can offer sufficiently attractive security.” Sir Harold Beauchamp added that the amount registered last year was £10,598,031 more than the amount registered in 1923, and £17,474,912 more than that in 1922. Obviously, borrowers with acceptable securities to pledge bail very little if any difficulty in borrowing last year. Or, to express it in another way, the conditions in 1921 for borrowers were infinitely better than in 1923 or 1922, and there was no real reason for prolonging the moratorium and dealing so harshly with tile mortgagee. The amount of mortgages on the register at the end of last year, arrived at by deducting from the total mortgages registered to date the amount represented by mortgages formally discharged; is approximately C2U7.881 ,!)<;S. "I am given to understand. however,” lie continued, “that this is probably considerably tu excess of the actual amount because allowances have to fie made for registration of mortgages for unspecified amounts, no cancellation of registration on discharge of a mortgage, multiple inclusion of mortgages registered in two or more districts or in respect of two or more properties, and other factors.