LONG-DATED LOANS.

Manawatu Standard, Volume XLVI, Issue 172, 22 June 1926, Page 7

LONG-DATED LOANS.

BANK OF NEW ZEALAND’S NEW POLICY.

SOME OF. rrs ADVANTAGES

[By Telegraph.—Special to Standard.] WELLINGTON, June 22. The policy of long-dated loans on the amortisation principle, as enunciated by the chairman of the Bank of New Zealand, is not unanimously supported by followers of the Government in Parliament, but when the proposals are thoroughly considered a more favourable trend of opinion may perhaps be expected. For one thing, it is pointed out that, apart from the gradual paying off of the loans, the new scheme will save the primary producers and others likely to be interested the present heavy expenses connected with the renewal of short-dated loans. Apparently the Government is not in any way committed to the scheme, and the ideas of the party as a whole will no doubt be ascertained before Cabinet will think about asking Parliament to sanction the scheme.

If legislative authority is obtained the Bank of New Zealand will be the first bank in the world to adopt such a system and there would not be any great necessity for the establishment of an agricultural bank in the Dominion. As a matter of fact, however, none of the banks doing business in New Zealand has any objeciton to the establishment of an agricultural bank as they recognise that it would have little or po effect upon their business. A very strong argument in favour of the new scheme as proposed by the Bank of New Zealand is that it would obviate the necessity of the Government going on the London market for loans for settlers and thus largely increasing the indebtedness of the country through loans that are not very popular with the British investor. THE NEW DEPARTMENT. FINANCIAL PAPER’S APPROVAL. LONDON, June 21. The Financial News, commenting on the movement of the shares of the Bank of New Zealand on the Stock Exchange, approves of tho decision to increase the capital. “The proposal to establish a separate department is also good as the bank is unable to undertake long-term mortgago business without sacrificing liquidity, while the experience of the Bank of New Zealand will enable the new department to press forward business more swiftly and advantageously than an independent concern. As the British Government is contemplating an institution to assist agriculturists with credit facilities, the development of tho New Zealand plan will be followed with close attention in Britain. —A. and 1 N.Z. sable.