HOUSING PROBLEM IN CITIES

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

HOUSING PROBLEM IN CITIES

If these bond issues under the Rural Advances Act prove successful they should take the strain off the State Advances Department so far as rural finance is concerned. There still remains, however ,the problem of coping with the housing difficulty in the cities, and here again we have applications in for loans to the extent of millions more than wo can hope to grant in any reasonable time. In each of the large centres those citizens who take an interest in housing and the prevention of slums are anxious to carry out a heavy house building programme. If the Rural Advances scheme proves successful I do not see why a similar scheme should not be inaugurated for the housing problem in the cities. There is undoubtedly a good deal of money in each centre available for investment, and if a strong citizens’ committee in each centre were to make a patriotic appeal to its citizeps to subscribe funds for housing purposes, I think the difhculty couldf be coped with without the Government raising more millions to be added to the Public Debt. The scheme could be worked out on the analogy of the Bural Advances Act by the State Advances Department. That is to say, a temporary advance could be made to build houses on the understanding that later on the citizens’ com-

mittee would appeal to citizens to take up bonds seemed on mortgages ot the bouses, and if they were willing to lend cheir money at about 5i per cent, the houses could bo built at a cost which would enable working men to pay a reasonable rent and sinking fund. ' The advantage of such a scheme would bo that each city would take a pride in grappling with its own problem, and the State Advances Department could be used as the channel for controlling the bonds and administering the Act without the bonds forming part of the Public Debt.

As an illustration of the inconsistent attitude of our critics, 1 quote from a recent interview with a deputation from a branch of the Farmers’ Union. These are' actual extracts condensed from the interview:—

“ The first matter is the necessity of getting money at cheaper rates. Wo suggest that the State Advances Department be quickened up and strengthened by more capital being put behind it. The second matter is we view with alarm the extent to which Government borrowing has increased, and we strongly urge the reduction of Government borrowing. The next matter is that we urge the early completion of the railway line in our district.” This interview took place only last month. If this scheme of long-term bonds does not prove satisfactory ive will have to fill up the coffers of the State Advances again. For it is quite clear that there are many farmers who have good security whom the private lender has ceased to cater for. The money is available, but it has to be collected and lent out through some State department. I am well aware of the fact that this will arouse more hostile criticism from farmers’ unions, cnambers of commerce, and other organisations whose members collectively denounce the Government for borrowing on the one hand, and yet individually implore the Government to lend_ them money. In my view, this question of farm loans is one of the most urgent and important national questions of the day. The springs of finance which formerly supplied the farmer have dried up, and if*l saw any prospect of inducing them to supply the want I would urge the State to hold hack.

But at present it does not appear that any reduction of taxation on money invested in mortgages, or otner expedients, will in the near future draw out private funds on the long terms that are necessary for the farmer. All we can do is to absorb private funds into the State coffers, and lend them out on' the amortisation principle; otherwise they will go into other channels which are less important from a national standpoint.