HOUSE OF REPRESENTATIVES. Yesterday's Afternoon Sitting.

Evening Post, Volume XLVIII, Issue 66, 15 September 1894, Page 4

HOUSE OF REPRESENTATIVES. Yes terday's Afternoon Sitting.

SECOND HEADINGS. Tho Land Drainago Act Amendment Bill (Hon. Mr. M'Kenzio) was read a second time pro forma, and referred to tho Agricultural Committee. The Harbour and Education Reserves Bill (Hon. Mr. M'Konzio) was formally read a socond timo and roforrod to tho Wasto Lands Committee The Inspection of Macbinory Act Amondmont Bill (Hon. Mr. Scddon) passed the second reading. The Mining District Lands Ocoupation Bill (Hon. Mr. M'Konzio) caino on for tho HOcond reading. The moasuro was approved by mombers representing many districts. Sir Bobert Stout said the Bill was not. as members supposed, confined to Crown lands, but permitted tho taking of land for settlemeat from Crown tenants holding louses of Eastoral land. A great wrong might thus o done. The eooond roadlng was agreed to. EvENiNd Sitting. OQVSKNHENT ADVANCES TO SETTLERS BILL. The Hon. Mr. Ward moved tho sooond reading of the Government Advances to Settlers Bill, which, he said, was to onablo Government to assist sottlors by advancing money to thorn on mortgago at reasonable rates of interest. Ho said tho principle of the Bill was first established in 1770 in Gormany, and hod been carriod ont in other plaooß since then with groat success. Tho objoot of this Bill was to allow tho peoplo of the colony to get money at lower rates of interest than at present prevail, and tho necessity for snoh a Bill was admitted by all. His opinion was that tho true solution of sottling tho people on tho land was a Bill of this kind. Ho pointed ont that the amount of private mortgages in this oolony was .£29,606,579, and Government wore aware of many cases in which good seouritios were offered for renewal of mortgages, but they woro refusod unless muoh higher rates of interest woro paid. The Bill provided that an office should be established for the administration of the Bill, but Government did not intend to oroate anothor indopondont Department. The serviaos of one of an existing office, with its staff, would be utiliecd for tho pnrposo, and by the use of tho existing machinery no additional esponse would bo innurrori under this head. Ho pointed oat that out, of .6153,475 loanod on mortgago by tho Public Trust Office only J31900 had been lost, while tho Govornmon' Insurance Department under the now Boird had lent &>IB,OOO :wd lost only .£IOOO. Governmont recognised that the strictest economy would have to bo exeroised in administering this Department. Not more than ton valuers, at .CGOO a year, and ten solicitors, at from .£IOO to .£IOOO a year, would be required, and this, he thought, was not an excessive expenditure for a Department of tho kind. The House would see that two systems were proposed for raising money— namely, obtaining loans by debentures np to -£1,500,000 and bjr lt>nd bonds, both systems in the aggregate not to oxceed .£1,500,000. He believed it would be better to adopt land bonds. Those bonds could be advanaed against special mortgages, and then transmitted to England. Tho security would be excellent, and this system would be preferable in many ways. The lowest sum to be advanced under the Bill would be £50, and the highest .£SOOO. He explained that whilst the Lending Board would be in a position to advance up to two-thirds of the value of the security offered, it would not be compulsory on it to do so. The Bill provided that in cases of lending money to settlers the ordinary conditions of leasehold must be complied with. The limit for which money was to be borrowed was 3Gi years. That was a necessity, but if in 15 years a man were in position to release his mortgago ho could do so. He referred at some length to the proposals respeoting an assurance fund, and said the element of safety was more provided for in this Bill than under any lending institution in the colony, including the Public Trust Offloo and tho Government Life Insurance Department. It was not intended to interforo with private interests, but Ministers wore determined that tho high fees hithorto paid in connection with mortgages should be reduced by tho Bill. Evory thing done .under the Bill, and tho wholo work of the Department, would be under the supervision of the Controller and Anditor-Geiieral. Thia was an important matter, and in this respect ovory safeguard had been taken. He said that many settlors had requested Governmont to move in the direction of advancing money as proposed by tho Bill. Tho fact ot Government lowering the rate of interest would also compel every other lending institution to do the same. He reminded the House that every oivilised oonntry in the world was moving in tho direction that this Bill indioated, which was a proof of the soundness of the proposals. Since the proposals had been mado £140,000 had already beon offered to be sent to the colony at 5 and 6 per cent. The Bill, he believed, was oalcnlated to add to tho wealth, prosperity, progress, and \ happinesß of the people of the colony. Mr. G. Hutchison said oheap money meant prosperity to every industry and ovory walk in life, and if it wero obtained by this Bill, then weloome to the project. He felt sure that Mr. Ward would be aseisted by tho Honse in making the Bill as workable as possible. The Treasurer had made a most important admission in saying that interest was high and oapital reluctant, and that was the reason of necessity for tbe Bill. That state of things was distinctly due to the polioy instituted by the present Government. Beferring to the Bill, he characterised the system of land bonds ns crude and incomplete, and he asked tho Treasurer if he was sure he could get 3} per cent, land bonds quitted in London at par. (Mr. Ward — " Yes.") He (Mr. Hutchison) held Government conld easily have got funds from other State Departments instead of injuring the oredit of the oolony in the oouimorcial world by borrowing a year for an unknown term of years. , Dr. Newman predicted that the Treasurer would not be able to float 3i per cent, debentures. The Treasurer proposed to borrow .£1,500,000 every year, and the result would be that in six years the debt of tbe colony would be increased to fifty millions of money, which would effectually prevent the oolony from borrowing in the future for legitimate purposes. The Bill was not intended to lend money to farmers, but to people living in towns, and he thought it should be called a Bill to smash the lawyers of the oolony and to make bankers. He held that very explioit instructions should be given to valuers under tho Bill, in order to provide against bad securities. Captain Bussell said there was a curious contradiction in some of the paragraphs in the Financial Statement and tbe speech just delivered by the Treasurer. In the Statement he told them that oapital was being hoarded up in the oolony, but ho (Captain Bussell) held that if that were so capital must have been so shaken in confidence by the administration of the Government for the last three years that it was hoarded up without remuneration rather than invest in good honest mortgages. It was very difficult to argue against snob a soheme as this. They were all naturally anxious to get oheap monoy if they possibly could, and he sincerely sympathised with the proposal to give cheap money to farmers. In 1877 he had advocated a similar scheme, but the rate of interest was then 8 and 10 per cent., whereas now it was muoh lower. Anothor important difference waa that capital was then not taxed as *t tho present day. He feared farmers would not benefit by the soheme proposed in this Bill to anything like the extent claimed by the Treasurer. The Treasurer had told them that values had reached bedrock, but he oould not agree with that, as one of thoir staple products, frozen meat, was' still declining, and they were not going to lend money from bed-rook prices, even though they had rcaohed these values. Ho feared there was not a sufficient margin between the prices at which money was proposed to borrowed and lent. He reminded the Houso that oapital was easily frightened, and large institutions would always bo able to hold their own. The proper way of helping farmers was, in his opinion, not to pledge them to the English money-lon ders but to , lend money from tho Publio Trust Office and other State Departments at the lowest possible rate of interest. Mr. Mills strongly supported the Bill, and held it was urgently required in the interests of the oolony. It wonld do far more to encourage settlement and provide work for the unemployed than any other measure introduced for years past. Sir Eobert Stout said tho Bill differed from the Budget in this] respect— that they understood in the Budget that money was to bo lent on freehold, whereas it was now proposed to be lent on leasehold. In the Budget it was stated money would only be advanoed to farmers ; now it was proposed to lend it on town property. He contended that the Treasurer had allowed nothing for tbe cost of raising the loan. Taking the Treasurer's own figures there would be a net loss the first year of £8925, added to whioh would bo £6250 mortgage tax, whioh had to be paid by tho mortgagee. Thus tho loss to the oolony on. the first year of this oxparimont would be But that wonld not bo all, for there would be loss in interest of at least one-half per cent., bringing the total

up to JE22.575. If, as the Treasurer had said, tho effect of this soheme would be to ■•li.-ipen monoy throughout tho colony, then it ttim a bad bargain- a bad bargain to tho hoi vo-'-r who wuf tio'l for 40 years at 5 per cent'- and it was a b.id bargain for the ci.luiiv which would lmvc to pay interest in I on. lon at I!'., and not be able to make a I mupH of i-rufit in the colony. He asked n tlio House to conmrtor before it plunged I tlio colony into a huge borrowing policy, t -I l, 0 HUm,' of tho Rill was in itß tail. Ihe b hmt fin ueo provided that if a man was bank- I nipt ho was not to be released from his n Crown debt, but must go down to hia gravo t ,i bankrupt. It was significant. J Mr. K. M. Smith gave unqualified support t to tho Bill. , t ' Mr. Millar said ho wa* not prepared to support tho Bill. Ho was returned pledged i to oppose a borrowing policy, and ho must t oppobo a Bill which authorised unlimited { borrowing, such as this. , Mr. Stevens suppo'tod tbe Treasurer 8 proposals, but wonld limit the scheme to small farmers, and not havo money lont on unimproved properties. Mr. Buddo considered the scheme safe if a fair proportion of loan was on farms valued , at .£3OOO and upwards. Mr. M'Gowan considered Sir Kobert Stout's speech unfair. He did not think the administration would be as economical as tho Troaburor anticipated. Mr. Mackintosh expressed his gratification that the Treasurer hod brought in this Bill. Mr. O'Began moved the adjournment of tho debate, and the House rose at 1 a.m.