The Daily News. TUESDAY, FEBRUARY 28, 1922. FARM MORTGAGES MEDIATION.

Taranaki Daily News, 28 February 1922, Page 4

The Daily News. TUESDAY, FEBRUARY 28, 1922. FARM MORTGAGES MEDIATION.

By the appointment of Mr. F. W. Flanagan (Valuer-General) as a Commission to inquire into the financial difficulties of dairy farmers, the Government has taken a practical step in the direction of an adjustment of mortgages whieh are pressing hardly on the producers in consequence of the fall in the value of produce on the Home market. It is stated that Mr. Flanagan’s principal duty will be to act as mediator between those farmei’ mortgagors who find themselves In financial difficulties, and the mortgagees, who in many eases have advanced more money than the property is now worth, and will have either to come to some compromise over their mortgages and interest, or run the risk of losing a considerable portion of their capital. It may fairly be claimed that the situation, although serious, is not alarming, provided means are adopted for tiding over the temporary depression. The main difficulty is in connection with those who acquired their land at the apex of the boom, and had to raise several mortgages in order to pay extravagant and wholly unjustifiable prices for the property purchased. Many schemes have been suggested in connection with this urgent necessity for readjustment, it being generally considered that it is imperative to grant time to enable farmers in distress to retain their holdings and meet their obligations as the values of produce improve. There are, however, some eases in whieh nothing’ but an appreciable reduction of the amount of the mortgages will be of any real service, so that some of the mortgagees must either accept an inevitable loss without ruining the farmer, or risk the consequences of foreclosure. They are not free from blame, for had they not encouraged the land boom by providing the sinews of financial war there would have been no such speculation as that which has created the present trouble. When the member for Hawke’s Bay (Mr. H. M. Campbell) early this month asked the Prime Minister, in the House, whether a remission of gift duty would be made by the Taxation Department in eases where mortgagees consented to cancel portions of mortgages, he stated that in consequence of the fall in the price of land some people who had sold land at high prices, on small deposits, were willing to cancel portions of the mortgagees in order to enable the buyers to carry, on. So far as security is concerned, the seller is perfectly safe in most cases, though he may have to emerge from a. retired life and resume active farming. The ValuerGeneral’s task in mediating between mortgagors and mortgagees will call for the exercise of very special qualities, though his success will largely depend on the spirit with -which his efforts are met by the mortgagees, whether they were the sellers of the land or merely speculating financiers. He is, moreover, to inquire into and report upon the whole conditions connected with the financing of farmers, and to suggest such action as he considers it advisable to adopt. On the assumption that the present position js only temporary so far as concerns values and inability to meet obligations, the chief aim should be to devise temporary expedients that will answer the purpose. It is an established principle of British justice that confiscation shall not be tolerated, so that whatever is done must be by mutual agreement. The only eases that need cause any concern are the genuine farmers, as sympathy need not be felt for the speculators. It may not even be necessary to have any portion of liabilities cancelled, so long as temporary relief is arranged and time given for values to improve. It would certainly be a dangerous and undesirable precedent for the Government to eome to the relief of speculators who participated in a mad gamble in land,

and Mr. Flanagan should be able to discriminate between the deserving and the undeserving. The farmers of the Dominion are much better off than those in most, if not all, other countries. It is quite right to help the unfortunate in a time of stress if it can be done without undue harm to others interested, and it is to be hoped that the efforts of the mediator will be crowned with success.