MORATORIUM.

Taranaki Daily News, 19 March 1921, Page 5

MORATORIUM.

PROPOSED EXTENSION. BILL BEFORE THE HOUSE. THE MEASURE PASSED. By Telegraph—Press Association. Wellington, Last Night. In the House of Representatives today, Mr. Massey moved the second reading of the Mortgages Extension Amendment Bill. In doing so, the Premier said the Bill was rendered necessary by the financial circumstances of the country. He knew there were two sides to the question, and that mortgagees had some interest in the matter, but he thought they should look rather to the good of the country generally than to the advantage of individuals. The Bill practically extended mortgages coming under the original Act for six months. Mr. T. M. Wilford (Leader of the Opposition) raised the question of extending the Bill to all mortgages. Mr. E. Newman (Manawatu) urged that if the lender was willing to grant a reasonable renewal, the borrower should be compelled to take it at the current rates of interest, and not avail himself of the benefit of this Bill. He thought the Bill .Bhould apply to all. mortgages. Mr. J. P. Luke (Wellington North) thought the benefits of the Bill should be extended to local bodies which raised money in New Zealand by using debentures; otherwise local bodies which had large sums falling due by using debentures would be seriously embarrassed. The Hon. E. P. Lee said there were considerations affecting both sides as to whether the proposed amendment should not be made. It would be a pity to amend the Act if it was going to interfere with lending in future. When the original Act was passed in 1919 it was definitely and distinctly understood that it should not refer to mortgages executed* after the commencement of the Act. There was a promise, in fact, and the public was given to understand that after that measure that if mortgages were executed they would not be interfered with. If they broke that promise and understanding no one would know where he stood. There were not, he thought, a great number of mortgages executed since 1919 which would fall due before October next, and he thought it would be unwise to amend the Bill so as to include them. Mr. V. H. Reed (Bay of Islands) said mortgagees were becoming frightened that people were not paying off what they owed, but were using their money to lend at higher interest. He suggested that mortgages should not be treated in block, but divided up as at different dates. Mr. J. A. Young (Waikato) said people were spending their money extravagantly on motor cars, thus detrimentally affecting exchange. Mr. Massey, in reply, said the debate had shown that the Bill was a necessity. It could not be dispensed without grave danger to many deserving people. The second reading was agreed to on the voices. At a later stage the Bill was put through committee, read a third time, and passed. EXTENSION OF MORATORIUM. GOVERNMENT’S ATTITUDE. • The Mortgages Extension Amendment Bill, which further extends the operation of the principal provisions of the Mortgages Extension Act, was put through all remaining stages in the Legislative Council on. Wednesday. In moving the second reading, Sir Francis Bell said the extension made by the Bill had been found necessary in view of the probability that Parliament would not sit early in July of this year. He wished to make it plain that these extensions could hot go on indefinitely. In 1919 Parliament had decided that if the contract was to be altered as to the date and as to the rate of interest, there should in each case be a tribunal —the Supreme Court—to determine the subject matter of the hardship as between the mortgagor and the mortgagee, and that the Court—not Parliament—should have the power to extend the peripd or to determine that in the circumstances of any particular case the money must be paid. There were many cases where the mortgage term ought to be extended, and there were many other cases where the mortgage term ought not to be extended, and where the mortgagor was taking unfair advantage of the mortgagee. Indiscriminate legislation, fixing a term at which all mortgages should become v due, would be obviously unfair and improper. What the Government lind Parliament had every reason to complain of was that though the Act provided a tribunal at a small expense, and invited the mortgagor and mortgagee —for either had the right to go to that tribunal and have a term fixed for payment of the principal—neither the mortgagor nor the mortgagee would go. The mortgagee complained that Parliament was constantly extending the period; he would have no cause to complain if he went to the Court himself, and had a definite period fixed and his rate of interest raised. On the other hand, the mortgagor, who had the right to go to the Court and have a definite term fixed by the Court, during which he should be free from all harassment, would not go either. Sir Francis Bell said he did not doubt that it would be necessary for Parliament to deal with the matter more definitely in the later session of this year. His view was that the action taken would have to aim at driving the parties to have the fair basis of their contract settled for them and not have the contract broken- from time to time by Parliament. His sympathies were almost entirely with the mortgagors, but some very hard cases were brought to the notice of the Government by mortgagees. Some men, in order to go to the war. had sold their properties on terms which gave them mortghges. On their return they found themselves without resources, while the mortgagors were flourishing on the properties and doing their best to evade payment of the moneys due. It was impossible to legislate for the mortgagor and ignore such cases as he had mentioned. The offer to both parties of the- intermediation of the I tribunal had produced nothing but complaints, both from mortgagors and mortgagees that the Act was doing them no good. \ So for as he could sneak for the Gov.

ernment concerning the end of the year —and no one knew what changes might come—there would be an end to these extensions unless the mortgagors and the mortgagees would accept tin* l tribunal Parliament had offered them. If they refused to do that, then both of them would be set free. H# did not invite from the Council reiteration of complaints from one side or the other. Every member had his pockets full of letters on the subject. His own pockets had long since overflowed into the waste-paper basket. He had been able to say to every complaint so far that the remedy was in the complainant’s own hands —that it would cost a £5 note to have a? decision from the Court settling the matter according to the degree of hardship the complainant was suffering.

The Bill was passed without amend naant. and without debate.