LENDING RATES.

Auckland Star, Volume LXVI, Issue 223, 20 September 1935, Page 8

LENDING RATES.

LABOUR CRITICAL.

MORTGAGE CORPORATION. MR. HAMILTON REPLIES. (By Telegraph.—Parliamentary Reporter.) WELLINGTON, this day. Strong doubts were expressed by Mr. XV. Nash (Labour, Hutt) when opening the Opposition comment on the Budget whether the Mortgage Corporation can improve on the State Advances Office by lending moiu;y at a lower rate than if the State Advances Office had been permitted to borrow at present rates.

The Corporation, he said, had issued £500,000 stock at 3 3-8 per cent. This gave it the right to issue stock to the Government to any sum at the same rate of interest. The chances were that the Government was paying on its money at least an average of 4 3-8 per cent, meaning that the Corporation was to take over securities at 1 per cent less than the cost to the Government. On £29,000,000, if the Government was paying 4 3-8 per cent the cost would equal £?.90,000, plus 25 per cent, which with exchange, £72,500, would total £362,500 per annum. Dividends would cost another £22,500 and salaries £0500. The work done for that was exactly the same as that done by the State Advances Department before, with no payment of dividends or directors' fees. The Government could .have borrowed all the money required at 3 per cent or less and to show that more money was available than the Government knew what to do with it had stopped selling post oflice savings certilicatcs.

The reply of the Postn&aster-General, Mr. Hamilton, was that a lot had been said by the LaDonr party about the cost of running the Mortgage Corporation, but the fact was that in the past a lot of difficulty had been experienced. They had placed £50,000,000 in control of certain people and the men who were asked to assume control of it were surely worthy of the job and should be paid accordingly. The Labour party blamed the Government for everything, but took credit for everything that turned out all right. It was better to pay high salaries than make a loss on business.