GOVERNMENT LOANS.

Hawera Star, Volume XLVI, 4 August 1926, Page 9

GOVERNMENT LOANS.

WORK OF ADVANCES DEPARTMENT.

MANY APPLICATIONS STILL IN HAND.

(by TELEGRAPH PRESS ASSOCIATION.) WELLINGTON, Aug. 3. In the House of Representatives today the Minister of Finance laid on the table the annual report of the State Advances. Office. During the discussion which followed the Hon. Air. Nosworthy .said that to date the sum of £43,779,120 had been lent out of .settlers. Of this sum £27,935,900 had been lent out in the last twelve years, during which the present Government had been in office, which was proof enough that the heart of the Government was in the work of

helping the settlers. They had been blamed for raising the rate of interest, but the fact wa.s that tlie cost of borrowing money had gone up from £5 2s 6d to £5 lls per cent. Had the Government not raised the rate of interest they would have been losing from £'52,000 to £55,000 annually, and no commercial department would be justified in doing that. At the same time no other lending institution had lent anything like a similar amount in the same time. When he was in charge of the department he had promised that the department would make an effort to clear up arrears to August, 1925, and this they had done, having paid out roughly £6,300,000. The Government had always, favoured long-dated loans to settlers, and not only had they endeavoured to provide them through the Advances Department, but had .striven to induce private lending institutions to do likewise. The Hon. Downie Stewart said there were now about four thousand applications for loans; which had not been dealt with. These involved about 34 millions of money. The department was thus about six or seven months in ar-

rears with clearing up the applications. Great progress had been made in clearing off these arrears, but the only way in which ho. could see that this could

be. done quickly and completely was to increase the lending authority of the department. At the same time the whole business was assuming such big proportions that lie hesitated to sug-

gest this expansion. He was not prepared to -say as vet whether the de-

partment would receive any relief from the scheme of rural credits. He had received a. report, from the commission which went abroad, but had only glanced at it. The report had reached the Government on Saturday. It was a very valuable one and would be submitted to Cabinet as early as possible.

after which it would he laid before Parliament.

Continuing, the Hon. Air. Stewart said: With regard to the disastrous effects which were alleged as going to follow the. raising of the interest rates by the Government, he desired to point out that these disastrous results had

not happened. They need not- happen, because the Government was still borrowing below the market rate and were lending below market rates. Further, by extending the period of the loans from 30 to 364 years, simultaneously with the increase of the rates of in-

terest, they had materially lightened the burden of the borrower, so much so that the extra cost to the settler was no more than 2s Id tier week per £IOO.

The paper was laid on the table