The Daily News. SATURDAY, OCTOBER 1, 1921. THE MORATORIUM.
As a temporary expedient to meet an unprecedented dislocation of finance and the consequent dearness of money, the Moratorium was completely justified, for had it not been instituted lenders of money may have called in their loans, with the result that many borrowers would cither have been ruined or reduced to a state verging on bankruptcy. The same remarks apply to those who had accepted deposits, so that it is not too muefc to claim that a serious financial crisis was avoided by means of the Moratorium. At the same time it was one of those enactments that are included in the category of war measures devised as a temporary protection for those who have to resort to borrowing. In the light of subsequent events it is easy to see that in the first instance provision should have been 1 made for gradually tapering off the protection instead of leaving the operation of the Act to be extended again and again. It is a common failing to be wise after the event, and at last the Government has attained to that stage of wisdom which has resulted in a further- extension of the provisions of the Act—which was inevitable—and making provision for the protection afforded thereby to gradually cease. The protection of deposits was rendered necessary by the increased value and scarcity of money, and it is obvious that one reason for that protection was the existence of the Moratorium. No sound financier could advocate a continuance of artificial credit a moment longer than is absolutely essential to the conservation of the financial stability of the producers and traders in the Dominion. The sooner normality is once more reached the better it will be, for though the Dominion’s credit may stand well on the London money market, it would only be courting disaster to continue indefinitely bolstering up the finances of borrowers and depositors. Under these circumstances the Government’s present proposals may be regarded as satisfactory, and should certainly tend to re-establishing that self-reliance which is so necessary for stability and progress. When Sir Francis Bell (Acting-Premier) was asked on Monday if the provisions of the Mortgages and Deposits Extension Bill would give depositors any security or priority over creditors, he replied that both were on the same footing, and it would be unjust to give depositors a priority. This ; may be legally sound, but seeing that depositors had no option but to continue, it would seem only just and fair that they should have that protection which priority gives. On this point Parliament may rightly over-rule the Minister. There is also the point that depositors cannot sue for their money, or apply to have the debtor declared a bankrupt, as can an ordinary creditor. Unquestionably the depositor is entitled to priorty.
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Taranaki Daily News, 1 October 1921, Page 4
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471The Daily News. SATURDAY, OCTOBER 1, 1921. THE MORATORIUM. Taranaki Daily News, 1 October 1921, Page 4
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