THE CHEAP MONEY SCHEME.

New Zealand Mail, Issue 1194, 18 January 1895, Page 4

THE CHEAP MONEY SCHEME.

The first meeting of the General Lending Board under the Government Advances to Settlers Act took place on Tuesday last, which was the earliest occasion on which a full meeting could be obtained. The first business was the appointment of subvaluers, and as soon as that is done about 400 valuations will be ordered. We understand that between 500 and 600 applications have been recorded, and that of these the Superintendent has marked rather more than 400 for favourable consideration. On a population basis the various provincial districts appear to be pretty evenly represented by the applications. They continue to come in at the rate of about 60 a day. Fifty-three were recorded on the 10th, and 40 the day before. This is exclusive of those that happen to be informal. The total amount of advances applied for is between J 5400,000 and .£500,000, and the security offered is valued (by the applicants for the loans) at ,£1,200,000.

As we have advanced from theory to practice, the time has gone by for any criticism of the principle. We have the scheme in operation among us, in full blast in fact, and it is our business to watch its working. Whether it is a good thing for the State to be the money-lender of its people, or whether it is a bad thing, is the question which for the present does not concern anybody, and will not concern anybody until the scheme has furnished some facts for discussion and the formation of opinions. At the outset, when the scheme was announced, its friends said that it would prove the most popular thing the Government had ever devised. It is early to say that this prediction has been verified. But it is already certain that the people are taking advantage of the scheme at a very rapid rate. The applications, aggregating nearly half a million, in a few days make that point very clear. How the colonists of a former generation would have stared at such an announcement as we published the other day of applications by private individuals for public money it needs no imagination to realise. Neither need we bo at a loss for the terms they would have applied to such a new departure. But we have advanced a good deal since then. How far may be judged by the calm reception of the announcement of the applications. The announcement has, as a matter of fact, excited but a languid interest. Here is a million and a half to be disposed of before March 31st next—a million and a half of public money to private borrowers, and at an exceptionally low rate of intei'est; and there is another million which will bo available after that date for the next financial year; and already half a million has been applied for at a rate which, if kept up, would cover the three millions in six weeks. sfet the public seems to look on without any astonishment or excitement or interest. The new departure has, in fact, become part of the national life, and causes no more stir than the publication of the bank rate of interest or the mention made in the almanacs of the celebrated ovents of bygone years. Another thing freely prophesied, not by its friends, was that there would be no securities on the terms, the three-fifths being held to be a fatal bar. No one, it was said, anywhere in New Zealand possessed any security good enough. There were, we heard on all aides, plenty of securities, but they were so mortgaged as to be beyond the redemption of any cheap money scheme worked by the State. But the securities offered are scheduled at values representing in the aggregate nearly three times the money applied for. In place of the one-third margin originally proposed, we have the other of a margin of two-thirds. The valuations are those of the would-be borrowers, it is true; and we do not know if the aggregate value is not

due to a few exceptional cases. Nevertheless, the margin offered does not prima facie look at all bad for this “ great loan land.” It is the most hopeful thing which has been made public since the depression settled down over the country. Then it was prophesied that the scheme would probably be muddled in working.. But so far the very contrary has happened, for the department has been organised in an incredibly short space of time, it is in grand working order, it is on a cheap basis, and it is keeping up handsomely with the rush of business coming before it. Far tougher tests have yet to be applied to the department, but it deserves to be complimented all round upon the excellent beginning it has made. What is evident now is that the scheme is pretty sure of a fair trial. When it has had that trial the result may be a well-grounded claim for considerable extension.