STATE ADVANCES

Evening Star, Issue 22382, 4 July 1936, Page 28

STATE ADVANCES

UNRESTRICTED BORROWING POWERS MINISTER DEFENDS POLICY MEASURE [Per United Press Association.] WELLINGTON, July 3. A view from another angle of the Government guarantee behind the bonds of the State Advances Corporation was taken by the Minister of Finance (Hon. W. Nash) in a letter to the executive of the Associated Chambers of Commerce of New Zealand today. The Minister acknowledged the representations of the association, which hud put forward some suggestions and also some criticism on the proposals contained in the State’ Advances Corporation Bill. He said the 'association had stated that the repeal of the restriction on the borrowing powers of the corporation was a serious breach of the letter of the contract which the corporation had entered into with those persons who had already advanced money to it. “ I cannot agree with this,” the Minister said;' “ in fact, it would seem that criticism might more legitimately have been raised from the other angle that, by placing a Government guarantee behind those bonds which were issued without it, the Government has enhanced the value of the securities without obtaining any quid pro quo. “In general,” said the Minister. “ the Bill was a policy measure of the Government to give effect to a definite promise made prior to the election. As there are advantages to be obtained from doing so, the corporate form of the institution has been retained, but provision has been made in the Bill to give the Government definite' control of the corporation. The extended lending powers given to the corporation are necessary to implement the policy of the Government in respect to housing and the development of industries.