ADVANCES TO SETTLERS.

New Zealand Mail, Issue 1199, 22 February 1895, Page 18

ADVANCES TO SETTLERS.

TO THE EDITOR. Sib,—The quotation from the Sydney Bulletin regarding our Advances to Settlers Act which you gave in your issue this week is incomplete without the following paragraph which succeeds that yovi have already published:—" Just now applications for loans are pouring in on the (Advance to Settlers) department faster than they can be dealt with. This effectually extinguishes the Tory assertion that the country doesn't want the new system, isn't interested m it, and feels that it is much better off without it. To the other class of pessimists who allege that the department will go broke by-and-bye through making excessive advances which the security won't be sufficient to cover when the inevitable depression comes along, it is only necessary to point out that the State is going to take much less risk in the matter than the average private lender. The ordinary Corporation lends .£IOOO on land' worth .£ISOO, and when a slump comes, say ten years hence, and the land is only worth .£9OO, a good part of its principal is gone. The State insists on getting back its principal by instalments, and when the same slump arrives its .£IOOO loan is reduced to about £877, and it is still covered. Moreover, in bad times a man with .£IOOO mortgage at 7 per cent, often throws up the game, while the one with a similar liability at 5 per cent, pulls through. Altogether the Slate Loan Department will be the safest, as well as the cheapest, money-lending concern in Maoriland. Meanwhile, many private lenders have reduced their rates from 7 or7-£ to 5 per cent, in order to compate with the Government office, and already the mortgagor feels considerably better." It is very evident from this that the writer of the "Wild Cat Column" in the Bulletin is a thorough student of New Zealand finance, and is far more to be relied upon as a critic than the writer in the Australasian Insurance and J Banking Record. —I am, &c, Satisfied.