THE MORATORIUM.

Taranaki Daily News, 20 December 1921, Page 5

THE MORATORIUM.

THREE YEARS EXTENSION. NEW MEASURE PASSED. THE LAST OF ITS KIND. By Telegraph.—Press Association. Wellington, Last Night. In the House to-night, on the motion to go into committee on the Mortgages and Deposits Extension Bill, the Hon. E. P. Lee said the whole position of mortgages and deposits had been carefully considered by the Statutes Revision Committee, and »-.s the result of inquiry December 31, 1924, had been fixed for the termination of the moratorium; This did not affect any mortgages executed after the coming into operation of the Act of 1919. It was intended that this was to be the last Bill of the kind the House would be asked to pass, as it was hoped the financial conditions would have settled by the end of 1924. The second part of the Bill dealt with deposits on call. The most important provision was that in cases of companies taking further moneys on deposit or issues of debentures they must utilise that new money to pay off money already placed on deposit. Any evasion of this provision would make the offender liable to a fine of £lOO. The date to which the expiry of existing deposits extended was July and October. 1922. The Bill bad been carefully considered by the legal and commercial world, and he thought it would meet all requirements. Mr. T. M. Walford (Leader of the Opposition) said that as this Bill was introduced into the House it was the most crude and ill-digested measure ever presented to Parliament, and he severely criticised the Government for asking Parliament to consider such a Bill. He would support the Bill as it had been revised by the Statutes Revision Committee, because it greatly simplified the position and removed many absurdities contained in the original measure. Dr. A. K. Newman (Wellington East) asked if the Minister could not agree to make mortgages repayable in rotation as they fell due. He urged that it should be made plain that at the expiry of the term of this Bill there should be no further moratorium, so that people would begin at once to make provision for paying off mortgages.

The Hon. J. A. Hanan (Invercargill) concurred in the opinions expressed that the Government should give a definite undertaking that this would be the last Bill of the kind. . If this was done it would restore confidence in the country. Artificial protection in the nature of a moratorium, if continued indefinitely would only lead to perplexity and trouble. The Hon. C. J. Parr said that though the war had ended financial conditions were in many cases even more difficult than in war time. Mortgages totalling £14,000,000 or £15,000,000 were falling due on December 31, and legislation was urgently necessary to avert the trouble that mu-t accrue and if serious financial dislocation was to be averted. The term fixed by the committee (three years) for the extension of the Moratorium was definite and final.

Mr. A. Harris (Wai tern ata) urged that depositors should be put in a position of preference creditors, and should receive interest at the rate of one per cent, above the current bank rate.

Mr. R. W. Smith (Waimarino) believed the Government’s proposals in the Bill provided the only means that would enable many people to pull through the critical times.

Mr. D. Jones (Kaiapoi), referring to building societies, said the** hqd monev Fnd should be made to disgorge. They had nothing to complain of under the Bill. No company should pay dividends to its .'hareholders until it had satisfied the calls of depositors. He considered an extension of time for repayments to July would make it difficult for many farmers to pay land tax. After the Hon. E. P. Lee had replied the Bill was read a second time and the House went into committee. The Bill passed the committee stage unamended, with the exception of the amendments moved by the Minister in clause 21. The date of the percentage payments of deposits was made January and July, instead of July and October. A new proviso was also added as follows: “Provided that where the borrower is a building society constituted under the Building Societies Act, 1908, or an incorporated company, whose principal object and business is lending money on mortgage of lands for fixed terms of years, or on conditions providing for the repayment of the principal and payment of interest by fixed periodical payments, the rate of interest payable by such borrower shall, for the purposes of this condition, be five and a half per centum per annum.” On the House resuming the Bill was read a third time and passed.