STATE ADVANCES

Dominion, Volume 29, Issue 208, 30 May 1936, Page 12

STATE ADVANCES

Loss on Contingent Liability BETTER OUTLOOK Finance Minister Reviews Position The possibility of a reduction in the contingent loss on advances to settlers under the State Advances Department was discussed in an interview last night by tlie Minister of Finance, Hou. W. Nash. Some reference to the question was made by Mr. Nash in his secondreading speech on the State Advances Corporation Bill in the House of Representatives on Thursday evening and last night he stated that as a result of reserves held by tlie State Advances Department the loss might be comparatively small. "When tlie securities of the State Advances Department were taken over by the Mortgage Corporation.” Mr. Nash said, “there was left in contingent liability a sum of approximately £8,900,000. Of that, about £7.000.000 was on account of principal and the balance was on account of overdue interest. A large proportion of the contingent liability on account of principal was associated with what are known as the 95 per cent loans. "It is not anticipated that anything like the sum in the contingent liability account will lie lost. Taking into consideration something over £3,000.000 held in the reserves account of the State Advances Department, it is quite possible that the loss will be comparatively small, mid there is an outside possibility that reserves which have been provided over the years will be sufficient to meet the whole of the loss.”