The Hastings Standard Published Daily. WEDNESDAY, APRIL, 29, 1896. ADVANCES TO SETTLERS.

Hastings Standard, Issue 3, 29 April 1896, Page 2

The Hastings Standard Published Daily.

WEDNESDAY, APRIL, 29, 1896. ADVANCES TO SETTLERS.

For the cause that lacks assistance. For the wrongs that need resistance, For the future in the distance, And the good that we can do.

The wonderfully good results that wore expected from the Advances to Settlers Act have not been realised. It is claimed that the work of this Government 'mortgage office has cauicd a fall in the general rate of interest, but those who set up this claim do so with party blindness in order to make the best of what appears a huge blunder. The Advances to Settlers Act has not caused, or even influenced, the fall in the rate of interest, and those who claim it has ignore patent facts. There is an abundance of money available for investment on mortgage, but this money has been in the main withdrawn from the field of speculation for safe investment, and this abundance of money, with the keen competition that is natural when supply is greater than demand, is what is affecting the Advances to Settlers Office, threatening it with a serious loss. The Advances Department cannot lend at a rate below 5 per cent., to which has to be added 1 per cent, sinking fund, and this is higher than the rate ruling in what might be termed the open market. On good securities money is obtainable as low as 4 per cent.; and this being so, is it to be wondered that the Advances to Settlers Oflice is not being rushed with applications for money ? The cry of the officials is that they cannot find an outlet for the enormous amount at their disposal, and Ministers are enraged with the department for taking the ordinary precautions, and insist that the rules be relaxed so that the money may be lent. This summed up means that the department is to be less anxious about the nature of the security and the margin of safety, but to lend the money as fast as it is applied for. The Lending Board has apparently accepted the Ministerial instructions, for, during the past two weeks, a very large sum has been authorised to be advanced on mortgage.

Up to 31st March last the amount authorised to bo advanced was £539,497, and allowing for advances in the interval the total amount lent probably does not exceed £650,000. It must be noted that there is a difference between " amount authorised " and " amount lent," but assuming that £650,000 has been lent, there still remains in the hands of the Lending Board about £850,000 for which an outlet must be found. The interest on this amount must be paid to the English bondholder, whether we make it reproductive or not. At 3 per cent, this represents an annual charge of £25,500, and unless the Advances to Settlers Office can find the money, the amount must come out of the Consolidated Revenue. The anxiety of Ministers is easily explained. Their forecasts as the voracity of the settlers for Government-loaned money, their statements as to the department being self-supporting, and other bomastic assertions have turned out to bo false, and the Advances to Settlers' office, ov(?r which the whole Liberal Party into hysterics, will present

an ugly appearance when dragged before Parliament. Instead of being a pronounced blessing, it will show itself to be an unmitigated nuisance and a serious loss to the taxpayers. We are sorry for this, for we are prepared to give the Seddon Government credit for a genuine desire to relieve the mortgagors of broad acres of the serious burden of interest payment. The failure of the scheme is due not so much to faulty administration as to want of foresight on the part of the Colonial Treasurer when initiating the scheme, and to outside competition. The Advances to Settlers Act, or, rather, the idea upon which it was founded, was a legacy from the late •John Ballance to his colleagues. Mr Ballance was indebted to a prominent Civil Servant for the proposal, and was greatly taken with it. But Mr Ballance's legacy was mutilated by the Hon. J. G. Ward, and in this he was more the victim of circumstances. Had not the Bank of New Zealand dumped down its liabilities and rotten securities upon the country, enslaving the State to the Bank, we would in all probability have had the original scheme embodied in an Act of Parliament. To have carried out the scheme submitted to Mr Ballance by Mr J. K. Warburton, the present Superintendent of the Advances to Settlers' Office, would have entailed a considerable loss to the Bank of New Zealand, for it was port of the scheme to effect a saving in bank exchange on London drafts. The Government rushed to the aid of the Bank, chained the country to the institution, and we are obliged to so order our finances that the Bank may earn the largest amount of profit at the least possible expense. So long as we are attached to the Bank of New Zealand, so long will the State financing be done to accommodate the Bank. In the Bank of New Zealand we have an emaciated bull-pup that we must each day tether np with a string of sausages.' Presently the animal will grow fat and ferotious, when we shall be obliged to bag it up and drop it into the sea. We, are indebted to Captain Russell among others for this very expensive P"P-