MORTGAGEES AND MORTGAGORS

Hokitika Guardian, 17 January 1931, Page 6

MORTGAGEES AND MORTGAGORS

FACING DIFFICULTIES

A VOLUNTARY SYSTEM OF

CO-OPERATION

AUCKLAND. Jam 10

Keen interest lias been evinced in Auckland in the discussion by the Waikato Executive- of the Farmers’ Union of a proposal made by the Hamilton Rotary Club, that a committee be appointed to bring mortgagees and mortgagors together with a view to relievin tin* financial difficulties of the producers. The farmers’ executive heartily approved of the proposal. “ I think the Rotary Club’s suggestion excellent,” said Mr .Malcolm Stewart chairman of the Chamber ot Com merce. “ 'Pile result will be watched with great interest. There is the case of the mortgagee who lias lent money on a farm property, and the mortgagor cannot keep up his interest payments on account of the low prices ruling for primary products. It would be no earthly use for the mortgagee to take over the farm—he would lx* worse oft than ever if he did not understand farming. There certainly ir.ii'-t he sain 1 co-operation between both. I. do not think it would he wise to re impose the moratorium. What is necessary in voluntary co-operation. Tf a man is forced off the land simply because prices prevent him from meeting his obligations. the unemployment position will become worse. The same argument applies to house property. What is t-li° use of a mortgagee taking over a house if he cannot re-sell ? “We are going through a very trying period, and everybody must endeavour to lend a helping hand. Tlie moratorium interfered with contracts between mortgagee and mortgagor, and in many instances in the pastmortgagors took advantage of the Act when they were in a position to pay. and there was widespread dissatisfaction.”

MAIN PROBLEM UNSOLVED

While admitting that a voluntary system of adjusting mortgages might he tried. Mr M. J. Savage. M.P., expressed a fear that such methods would merely scrape the fringe of tlie trouble uirl leave the main problem still unsolved. Hi.s advice was to tackle the difficulty comprehensively along the lines suggested by the Labour Party in 1924.

“Tt is as well to say right away,” said Mr Savage, “that as far as is humanly possible both parties to a mortgage contract must be safeguarded, and to bear in mind that the problem facing us to-day does nov apply to farming only, but to towns and cities as well, where people are losing their homes on account of inability, through unemployment and general depression. to maintain payments. What was done in the past in the way of a moratorium only protected capital. It did not protect the interest-payer at all. A man had to pay interest just the. same. Tt looks to mens if the same problem is with us to-day. arid we must consider what we are going to do regarding interest- payments ns

-apital invested in mortgages. The Hamilton people are now suggesting a voluntary system, and no doubt it would be helpful.

A PREVIOUS ATTEMPT

• One of the retiring Judges was appointed in 1924 to go through the Dominion with the object of bringing mortgagees and mortgagors together to see if they would voluntarily agree to certain readjustments in eases where it was obvious that nothing else could he lone. He met with a certain amount of success, hut it was only a case of dealing with the outside of the problem. That appears to he the weakness of the voluntary system. It might be tried now, but 1 am afraid it will only touch the very fringe of the trouble, and there is a danger that our productive agencies will be curtailed by the sacrifice of the farmers. The Dominfoi: as a whole will have to lace up to us obligations. “For the very reason that production has been allowed to fail because of the sacrifice of the farmers, 1 would argue now, as the Labour Party argued in 1921 and in 1924. that it is imperative that we go forward with a conscious proposal in our minds and face up to the problem as it is. without any intention of sacrificing either party to the contract, but with the idea of dealing with the difficulty. After all. unless we deal with it. the natural laws have a Knack of working out their own way. and this will not he to the interests of the Dominion. However, the voluntary system might be tried.”