New Guinea Mortgages

Interest Reduced

THE reduction of interest on mortgages registered in New Guinea has been provided for in a New Guinea ordinance (No. 31 of 1934) which has just been pro mulgated.

It provides that in the ensuing two years all mortgages on New Guinea land other than mining land shall be reduced at the rate of 5/- for every £1 of interest, but that the rate of interest is not to be reduced by this new law to a lesser sum than £ 6 per cent.

This means, of course, that where the rate of interest has been 8 per cent, it now will become automatically reduced to 6 per cent. Where the rate of interest has been 7 per cent, the reduction propor tionately will be less, because the pro vision in regard to a minimum of 6 per cent, becomes operative. Where the in terest has been 10 per cent, the reduc tion will be from 10 per cent, to 7½ per cent, (that is £10, less ten times 5/-).

Nine per cent, now becomes 6¾ per cent.

This matter of the reduction of mort gage interest in New Guinea was placed before the meeting of Pacific Administra tors in Canberra in March last. For this reason some surprise has been expressed that the law has been introduced in New Guinea and not in Papua, where condi tions are similar.