8.—4,

1939. NEW ZEALAND.

ADJUSTMENT OF MORTGAGES AND LEASES (REPORT COVERING THE).

Presented to both Houses of the General Assembly by Command of His Excellency.

Office of the Under-Secretary of Justice, Wellington, C. 1, 22nd September, 1939. MORTGAGE RELIEF LEGISLATION IN NEW ZEALAND.

INTRODUCTORY. Subject to the exercise of certain residual jurisdiction (such as authorizing sales of property in respect of which there has been an adjustment) and a few odd cases awaiting finalization, the administration of the Mortgagors and Lessees Rehabilitation Act, 1936, is now completed. The object of this report is to examine the results, as far as is possible at this stage, and to make any recommendations which that examination suggests. In order to obtain the necessary data, each Adjustment Commission was asked to forward a report in the form of replies to a questionnaire submitted by the Department. Before proceeding to consider the administration of the Act it is as well to recapitulate as briefly as possible the sequence of events which led to its enactment. PRICE MOVEMENTS, 1914 TO 1931. At the commencement of 1914 the currencies of the principal countries of the world were linked to gold. In most, if not all, countries the gold standard was suspended soon after the outbreak of war, and during the immediate post-war period the collossal burden of national debts kept currencies off gold and the subject of the most extraordinary and extreme fluctuations. The end of the war saw most of the principal Governments of the world, including Great Britain, France, Germany, and the United States of America, loaded with enormous debt burdens. One would have expected as a result a lessening of the value of money and a high price-level and, indeed, such a position ruled for many years. This must inevitably be the position in respect of internal prices in debtor countries, since the alternative would make the debt burden unbearable and render it impossible for such countries to compete with debt-free countries. It is, of course, a process of partial repudiation ; and, as is well-known, Germany carried the process to its ultimate end, the complete devaluation of her currency and the consequent entire remission of her load of private and national debts. Although Great Britain carried one of the heaviest debt burdens of any country in the world, the tremendous holdings in Great Britain of loans to foreign countries and to dominions payable in English currency in Great Britain held the balance as against inflation. For a period this induced that country to return to gold.

I—B,1 —B, 4.