THE FINANCIAL POSITION.

New Zealand Herald, Volume XLV, Issue 13918, 27 November 1908, Page 5

THE FINANCIAL POSITION.

MORTGAGES AND LOANS.

[BT TELEGRAPH. —PRESS ASSOCIATION.]

Napier, Thursday. At the annual meeting of the Napier Chamber of Commerce to-day the president (Mr. C. Ellison), in his address,' made reference to the financial stringency. "So far as my observations go," he said, " I believe this has been most- pronounced in the direction of loans on mortgage. - What is the cause of the financial stringency and when it will end arc questions which have been wide!V discussed without throwing much light upon the matter. One factor which I think has been overlooked is the withdrawal from the Dominion* of practically all bona-fide mortgage companies, who have been driven out as the result of the operations of the Advances to Settlers Act, it being impossible for them to compete with an institution which is e.x*mpfc from the mortgage tax which they had to. pay. In this district alone three companies, whose investments amounted to considerably over £1,000,000, have been wound-up, and in other parts of the Dominion the same thing has occurred, and on a much larger scale. ,The low rates of interest introduced by the Advances to Settlers Act doubtless contributed largely to the industrial activity of the past few years, but when we bear in mind the following facts—(l) the depreciation in income it caused widows and all those dependent on the interest derived from investments ; (2) the fact that it inflated the value of, land without increasing its producing capacity ; and (3) the present scarcity of money for loan purposes caused by the withdrawal of all mortgage companies, and the annua) loss of, say, £15,000 for mortgage tax—it becomes a question for consideration whether this much-applauded Act is an unmixed blessing." Mr. Ellison went on to express the opinion that the mortgage tax should be abolished, and foreign capital be allowed to compete on equal terms with the Government Department.