CHEAP MONEY

Gisborne Times, Volume LXV, Issue 10303, 14 June 1927, Page 2

CHEAP MONEY

STATE TO 1 HELP' PRIVATE LENDERS.

BONUS OF 2 TO 2-1 PER GENT.!

A plan to provide cheap money by encouraging private ■ lenders to- lend at low rate of interest on rural securities to be subsidised by the Government, was advanced by Air. H. E. Rent to the Poverty Bay Farmers Union on Saturday. He forwarded the following letter on the subject: “I suggest that the Government bo petitioned to encourage private persons and others to advance cheap money, say at 4 per cent.-, on rural security by undertaking to pay an additional 2 per cent, or- 21- per cent, on loans approved by them, the maximum period for such loans to be of, sav JO years. Now that gives the lender a normal rate of interest for his money, and at the same' time improves his security, which is one of the vital points to the lender, for the borrower having obtained money at a cheap, rate will certainly encourage him to do his very utmost to meet his obligations, with, the big hope of eventually freeing himself. “Now, to secure the Government advance of 2 per cent or 2.1 per cent., 1 suggest that before registration of a sale, transfer or discharge of a. property carrying, such a loan,, it should be incumbent on the borrower that the annual 2 per cent, or 21 per cent, bo cither repaid,, or secured on the property. On this scheme the Government is not called upon to iind a very large amount of capital, and the extra amount of production, rates, taxes, etc., created by these loans would surely compensate the Government for any monetary loss they might sustain, and moreover, the-' money having been advanced by private parties instead of through. Government ollieials, the security would bo oil a sounder basis, having had the personal inspection and supervision of the lender, and the money would be more quickly obtained after approval.” ft was decided to write to Mr. Kent, telling him that the matter ut rural finance would; he fully dealt with bv the Dominion conference.