The Guardian And Evening Star, with which is incorporated the West Coast Times TUESDAY, NOVEMBER 15, 1932. AN IMPORTANT MEASURE.

Hokitika Guardian, 15 November 1932, Page 4

The Guardian And Evening Star, with which is incorporated the West Coast Times TUESDAY, NOVEMBER 15, 1932. AN IMPORTANT MEASURE.

Tiik amendments to the National Expenditure Adjustment Act, introduced last week, are oi considerable importance. Provision is made for the of insurance policies from the category of chattels and to give mortgagors of such policies the right to claim the same reductions in interest as in other cases. Some, if not ■all, of the insurance companies have treated their insurance policies as chattels and' have accordingly declined to make any interest reduction below 6| per cent. Another clause makes it clear that debentures and “on demand” mortgages are not exempt from the reductions, unless they are exclusively secured. There is further provision regarding the reduction of interest on company debentures and debenture stock. The effect is to exclude in the case of such securities the provision of the principal Act as to the hypothetical rate of interest and also the provision* as to the upportionment of the principal moneys f,s between chattels- .and! other property. The result is that the minimum below which interest is not reducible is fixed at 5 per cent,, and the actual rate of interest fixed by the security is always to he taken as the basis of reduction. The ‘amendment is made retrospective. “Peak” interest rates are dealt with. In the principal Act it was assumed that interest rates were 'at their peak on January 1, 1930. It has been represented that certain lending institutions had substantially reduced their rates before that d-ife. The object of the clause is to enable the GovernorGeneral to alter the date to any date intermediate between January 1, 1925, and January 1, 1930, so as to give the institutions concerned the benefit of the reductions that had been voluntarily made to their -clients. A further elausp in the Bill deals with the question of ground rentals. The object of the original Act was to protect ground rents from reduction, unless in any case such rent exceeded 5 per cent, of the unimproved value of the land in respect of which it was payable. The Minister of Finance 'pointed out when the Act was passed that the provision might operate inequitably as between local authority or other lessor concerned and the lessee and sub-lessees. The object of the new clause is to give persons interested in ground rents (either as lessors or tenants) an opportunity to make representations on a proposal to repeal the section of the Act . which gave rentals the partial exemption mentioned. The provisions of that part of the Act dealing with stamp duty are amended. It is to be made clearer that securities held by Government trading departments are subject to the stamp duty imposed by the original Act. It was laid down in the principal Act that its provisions had no application to ordinary securities issued after the passing of the Act. There are certain cases, however, where the holder of one form of security voluntarily exchanges it for another and it is proposed to permit of the issue of a new security subject, to the same conditions as to stamp as- the surrendered security. The main Act provided that the net- amount of stamp duty collected in respect of securities t issued by local authorities should be made navr'Ae to. them. There are cases where the real burden of debt represented by the security is borne by some other local authority, a-nd it' is now proposed to permit of the benefit- of the stamp duty being received by the local authority actually responsible for the debt. It is proposed to bring within the term “investment v society” an individual who may under his own or an assumed name, be carrying on the business o* accepting moneys on deposit. Another provision requires building societies to furnish quarterly returns of deposist- held by them in respect of institutions accepting money on deposit. There is a machinery clause drawing clearer the line of demaica- ' tion between investment societies and trading companies. In the principal Act provision was made for fixing . the rates of interest payable on deposits by savings banks, building societies, investment societies and trading companies. The Bill makes a corresponding provision as to the rates of interest to lie paid local bodies on deposits receive 1 by them. If savings hanks, building societies, investment societies or trading companies pay or offer to pay a rate of interest in excess of that fixed, they wid bo liable to a fine of £IOO, am the trustees, directors and principri administrative oflkers to a fine of £2O.