STATE ADVANCES

Evening Post, Volume CXVI, Issue 84, 6 October 1933, Page 6

STATE ADVANCES

POSITION OF THE FUND EFFECT OF DEPRESSION The annual report of the State Advances Office, the largest lending body in the Dominion, throws into high relief the difficulties of mortgagors. The office collected in interest during the year £2,222,626 and mortgages and instalments of principal repaid amounted to £1,362,776. But the long-con-tinued depression shows its result on the balance-sheets of the separate branches, which have been obliged during the year to write off losses on realisation of securities and doubtful securities written down as follows:— Advances to Settlers branch, £92,743; Rural Advances, £40,647; Advances to Workers, £50,670. Total, £184,060. The interest accounts of these branches include, the following figures of interest on mortgages overdue as at March 31 last: —Advances to Settlers, £700,178; Rural Advances, £231,789; Advances to Workers, £517,398*. Total, £1,449,363. Taking the accounts generally, it is shown that the percentage of arrears to the balance of advances outstanding is 4.19 per cent., and the office has advances on mortgago Current to the extent of £43,834,387. It is stated by the superintendent that in some cases realisations of securities has been necessary, but in the main a policy of "nursing" securities against better times is being followed. The ultimate losses of the Department due \to the prolonged economic depression will not, adds the report, be ascertained until prices and wages are stabilised. Unless' the price levels of primary produce substantially increase, the losses will bo considerable. The report also stresses the- necessity for further provision in the Advances Office sinkingfund for the redemption of the loan liability, though uo accretion to -this fund waa possible .last year. The profit and loss accounts disclose that the throe principal branches of the office made losses which, aggregate £243,861).