RURAL LOANS

King Country Chronicle, Volume XXXIII, Issue 4809, 12 July 1939, Page 6

RURAL LOANS

PARTIAL RESTRICTION. STATE ADVANCES CORPORATION HOUSING GRANTS PREFERRED. Inability on the part of several farmer applicants to secure loans from the State Advances Corporation has revealed the fact that the Government has curtailed lending in certain respects on rural securties. Preference appears to be given to advances for house building, although the partial restrictions on rural loans does not appear to be severe, and it is stated they are of a temporary nature only. Several farmers, in being met with a refusal by the State Advances Corporation on an application for finance, have stated that the reasons given by the Corporation have been that the large number of applications received for loans for new dwellings have received preference over other applications, as a result of the serious shortage of houses throughout New Zealand. It has been assumed in some quarters, as a result, that the interests of the farmers have been neglected for the sake of assisting town dwellers, but an investigation made among several different applicants for finance reveals that such an assumption is not entirely correct.

Where Restriction Lies.

Several farmers have been met with a definite refusal for finance when the application to the State Advances Corporation has been for money to repay an existing private mortage on a farm, which if secured would give the property owner a State mortgage at a more favourable rate of interest. Previously, the Corporation made advances for the purpose of repaying existing private loans, provided the security was available. That appears to be the main restriction imposed by the Government in the meantime, and it is apparently a total restriction. Such applications, however, are being filed by the Corporation, if applicants so desire, until such time as the Government again makes money available for that purpose.

Farmers who have made application for loans for purposes other than repaying existing private mortgages have, in most cases as far as can be gauged, been accommodated, although the Corporation's preference to loans for house building may result in a delay to rural applicants. From inquiries made, however, it is learned that several farmers have received advances for building purposes, and it does not appear that a recent statement that farmers are unable to secure money for building on rural properties is wholly correct. Nevertheless, the Farmers' Union has often expressed the opinion that the Government is not making sufficient money available for the building of farm cottages for married workers.

Advances for Other Purposes. It has been stated by the Minister in charge of the Corporation that the main concern is to encourage the development of production. Applications for loans for purposes considered by the Corporation to be unwarranted, or too lavish for the capacity of the farm, or unnecessary from the point of view of production, will therefore conceivably be refused. The original work of the Corporation was to encourage development for workers and settlers in cases considered to be necessitous. In 1913 there was a similar concentration on advancing money for houses, until the Great War lessened the demand for homes. Reference to the Corporation's activity was made in the speech by the Governor-General at the opening of Parliament last month. No definite policy appears to have been stated by His Excellency, however. He did remark that loans amounting to £2,062,275 had been advanced by the Corporation for building 2123 private homes in the Dominion last year. In the speech reference was made to the intention of the Government to facilitate not only the improvement of farm lands, but also the raising of the standard of housing available both to farmers and to their employees. Nothing definite regarding the Government's aims has yet been released, however.