STATE ADVANCES.

Auckland Star, Volume LXII, Issue 201, 26 August 1931, Page 9

STATE ADVANCES.

DEPARTMENT'S SOUNDNESS

TESTIMONY OF MR. FORBES

WELLINGTON, Tuesday. A suggestion that the State Advances Department is with difficulty owing to an abnormal number of failures by its borrowers to repay the usual instalments of principal was brought under notice of the Prime Minister by the "Star" correspondent. Mr. Forbes promptly denied the accuracy of the report. "The Department," he , declared, "can quite adequately cope with all ite business requirements out of its own reserves, without assistance from the Consolidated Fund. There is no trading department of the State in the slightest degree embarrassed in conducting its business under present conditions."

The annual statement of the Department's accounts to March 31, shows that repayments of principal have been well maintained. Mortgages and instalments

of principal repaid under the Advances to Settlers branch during the year totalled £960.202; rural advances branch. £96,881; advances to workers, £555,181; and local authorities, £75,378. The main activity of the Department is advances to settlers, in connection with which it holds a reserve for bad debts of £124,852, a sinking fund of £1,736,600 and a reserve fund of £25,000. The report showed overdue interest at £238,084, and made the Department a net profit of £15,313 on the year, after paying income tax.