STATE ADVANCES COMPLAINTS

Evening Star, Issue 19552, 10 May 1927, Page 2

STATE ADVANCES COMPLAINTS

Complaint is rifo that applicants foi loans are kept waiting for many months'for their loans. That complaint can only he reuiedied if the Government is prepared to borrow far more heavily than at present. Private financial institutions and individuals have become extremely reluctant to lend money on farms for various reasons—partly on-account of fluctuations in land' values, awl partly up. cause local bodies are continually offering securities at attractive interest rates. I can remember when _ private investors would lend on nothing but broad acres, and would wait a long time for such an investment rather than take city securities. But the whole nosition is now changed, quite apart from the fact that State advances are more popular with borrowers because of the instalment system of repayment. But in any case, whoever lends the money, borrowers will always complain that the valuations are too conservative. However, every one must see how difficult it is to assess the real value of land with prices fluctuating so ranidly as thev have done in recent years. If prices could only he stabilised at even a moderate figure it would make evervono’s position more satisfactory. Another complaint often made by farmers is that too much money is being lent for building houses. in towns, instead of helping the farmer to dcvelrn and improve his land. To remedy i his complaint, when I took control of the State Advances Department wo restricted the limit for each city man for housing to £1.200 (or £1,500 m special cases), instead of £3,500 ns was nreviouslv tho case. It seemed to me tho» if a'man wanted to borrow moie than £1,200 to build a house he was well enough off to borrow privately. Fur thermore, we arranged that no loans should be granted in city or suburbs to pay off existing loans. The reason for this was that anyone who merely wanted to pay off a private loan to get easier terms from the State_ advances, was not in so urgent a plight as a man with no house at all. VVe also decided not to lend money to buy ousting houses except under special circumstances, as such a course did net he.p to solve the housing problem. , Now, turning to country applications, we find that, even with the : cstrictions T have mentioned on city borrowers, wo get about three times as many applications from town as wo do from the country. But we try to see that country settlers get their fair snare of tho money available, and in recent years it has been about half and half. We also expedited the country loans, so that some time ago we were only three months in arrear. hut with the tremendous pressure we have now dioyped back again. But in my view the portion is not satisfactory, even with regard to countrv loans, as far too largo a proportion of the applications are to pay off existing loans. It is surely more important that loans to develop land, to clear bush, to apply fertilisers, should take precedence, hut these applications form a small part of the total. Is there any way in enormous demand for millions to finance farmers and houses can ho met without adding to the Public Debt and incur, ring tho criticism which follows on each increase, even though such debt is no burden on the taxpayer ?_ W r o are trying out an experiment in this direction under the Rural Advances Act, which came into force on April 1.