ADVANCES CORPORATION

Evening Star, Issue 22351, 29 May 1936, Page 8

ADVANCES CORPORATION

THE SECOND READING DEBATE OPPOSITION CRITICISM MILD INTEREST VARIED WITH PUBLIC UTILITY [Per United Press Association.! WELLINGTON, May 29. The House met at 10.30 a.m. The second reading debate on the State Advances 1 Corporation Bill was resumed by Mr Forbes, who referred to the establishment of the Mortgage Corporation, and said that after all it was not the legislation that mattered but the spirit in which it was administered ; and he considered that the Mortgage Corporation had meant a forward step, and that more effective work could have been achieved by it than under the State Advances Department. The Prime Minister had set out his ideals, and not much difference could ho found with them, but it was the duty of the Opposition to. point out the difficulties that would arise in trying to put them into operation. He mentioned the difficulties of speculation. He said the farmer would be penalised by the provision that no goodwill would he allowed. Prices must rise, despite the assurances given by the Prime Minister. An attempt to stop prices rising had been made in the past, but had failed. Mr Savage had said the Government intended to reform the monetary system, and lie pointed out the difficulties that had been encountered in Alberta when that was tried. He agreed the system might be improved, but if they could scrap the present one and establish a new one, then he would say the age of miracles was not past. If it were not for the risk that would follow, the attempt would be most interesting. Mr Forbes suggested that a research department should be set up to go into the question of housing construction in an endeavour to got costs down. He urged the Government to be very careful in embarking on the principle of taking shares in industries, but thought, if i.t was done after proper investigation, it might be an economic proposition. He hoped the new corporation would be a success, as he wanted to see the present difficulties overcome. Mr Williams said the machine they were building in that Bill would bring great blessings to the people. The Leader of the Opposition had been unable to find any flaws in the measure, and had contented himself with criticising the spirit behind it. Housing of the people was a national need, and it was only right the people should pay something towards a national housing scheme. He would not suggest an advance should be given at a very lowrate, but said the interest rate would be varied according to public utility. At present interest rates varied according to the value of the security, so that this was a new principle. The Bill gave the Government power to direct capital where it was most necessary and where it would give the greatest benefit to the public. Sir A. Ransom said the Bill was a reenactment of past legislation, and was a retrograde movement. It would not operate in the interests of the country, and placed a business department directly under political. control. . He thought it was a wise provision that the Government should guarantee bonds, but considered that the Bill was of a less generous character than the Mortgage Corporation Act. It was conservative rather than liberal. It was regrettable that any weaknesses that might have been apparent under the last Act were not likely to be removed by the present Bill, because it was more conservative.. He thought the provisions of the Bill were based on sound finance, and there was no great variation from the conduct of the Mortgage Corporation. Ho took it that when the Prime Minister said the Government was going to keep prices from rising he referred to interest. He said it would have. been better had the Prime Minister said interest instead of prices, as interest was more applicable to the Bill. Mr Barclay said the Bill before the House would assist farmers to obtain money at reasonable cost, and it would assist the workers in towns to obtain money to build homes. Mr Poison was perambulating the country saying the Government was going to nationalise the land, but the Bill showed that the Government was not going to nationalise tho land. He did not agree with the members of the Opposition that costs would rise. He thought the Mortgage Corporation did mox-e than anything else to put tho last Government out of office. Mr Barclay said the Bills brought before the House had done away with the smug complacency met with a year ago, and he said that during the coming recess the Government members would go out into the country to discuss that and other measures that had been passed with the electors. Mr Hamilton: So will we. Mr Barclay said the Mortgage Corporation had been lending on a conservative basis. He knew of cases where an application was made for 33 1-3 per cent, of the value of land, hub the applicant could not get it. He thought the Bill would be accepted by the farming population, who would look to it in the future; and with sympathetic administration there was no limit to its possibilities. Mr Broadfot claimed that the Mortgage Corporation had been responsible for lowering interest to a level it had not been at for very many years. The main framework of the Mortgage Corporation had been adopted by the Government, and that was a compliment to the past Government. The luncheon adjournment was taken.