STATE ADVANCES.

Auckland Star, Volume LXI, Issue 62, 14 March 1930, Page 8

STATE ADVANCES.

DEPARTMENT'S SUCCESS.

£8000 LOST IN 23 YEARS.

VALUATION PROCEDURE.

(By Telegraph.—Special to *' Star.")

WELLINGTON, this day,

"Ridiculous," was the only official comment upon the statement of a Christchurch businessman that the State Advances Department was adopting a policy of discouragement by offering persons less than they applied for, in order to keep up the impression that loans are being made.

It is known that from its inception the State Advances Department has pursued a policy of prudent and careful administration. Evidence of that is furnished by its losses in the whole period of operations. Recently it was revealed that the Auckland City Council was forced to write down the value of Go houses which it had built by £15 000 For three years the Railway Department lost over £00,000 per annum on housing schemes through the contraction o°f values, which could not be foreseen Li the 23 years of its existence, "the ?i a nl Advances Department financing 30,000 houses, has not lost 1/ per £100 of the capital investment—its losses have been less than £8000.

It is obvious that to complete a record of this nature, the Department must have been managed with the greatest care. In-practice, what happens is that every application for a loan is . very keenly scrutinised, not on the ground of security alone, but to see that the contract price for houses to be constructed is not too high. In innumerable cases, savings running into larwe figures have been made f or applicants by the Department refusing to finance certain houses on the ground that the tender for the proposed dwelling was ex cessively high. In the case of security, the operations of the Department must be rigidly within the provisions of the Statute which provides that the advance shall be based on the Government valuation Where there is a valuation to be made' the persons who shall make this valuation, are nominated the State Ad ]

v&nces Act, and they are Government valuers. Once the value is'. determined; the Department must work within it* prescriptive limits. One complaiivt from Christchurch, on which the allegation of v discouragement was based, give u statement of a man who was under the impression that the amount of .a. settler's advance was three-fourths of tlie money to be expended. It is qqite apparent that even if it had the statutory, power it would not be a'wise-policy for the Department to encourage the espenditure of a man on house and land where it was of opinion that the price ,of the house or of the section was excessive It is also quite ob/ious tliat if? t'.ie Department made advances on this bash it would not. have enough security 'to cover its advance, and -that it would not have come through 23 years'of trading with such small loss. ■' t ■ i