State Advances on Lauded Security. (from our own correspondent.)

Otago Witness, Issue 1764, 12 September 1885, Page 12

State Advances on Lauded Security. (from our own correspondent.)

Wellington, September 4. The committee appointed to report on advances on land in terms of Mr Macandrew's motion of 2nd June last, " That a Select Committee be appointed to consider a report as to how far it is expedient that the credit of the Colony should be applied towards making advances at a low rate of interest to settlers on the security of their land ; also as to the best mode in which such credit may be so applied," report as follows : — One of the chief drawbacks to the full and successful development of the agricultural and pastoral resources of New Zealand by men of limited means, is the high rate of interest on mortgage, and the extent to which such interest is withdrawn from the Colony by absentee mortgages. From this statement appended here it will be seen that the number of mortgages in New Zealand for sums ranging from LIOO to LIOOO is 32,788, representing a tbtal^ amount of L 10,449,676. The numbers for "mortgages of LIOOO, and under L2OOO, is 663-1, the value of which the committee were unable to ascertain. A very large proportion of these mortgages are held on the security of land, and probably it would not be beyond the mark to estimate the average rate of interest of such loans (inclusive of cost) at not less than 8 per cent., and often much higher rates have to be paid. These figures will serve to indicate the large extent to which relief would be afforded if the rate of interest could be reduced to 4, or even 5, per cent. From the information before our committee it is evident that great benefits have been derived in various countries from loans advanced by the State on the security of land, notably in Prussia, where the system of making advances on land at a moderate of interest, by means of State notes, which are legal tender, was initiated about the commencement of the century. Loans on a similar principle have been provided for by statute in several of the North American States, among which may be mentioned New York, Pemiyslvania, and Massachusetts. Without further preface, your committee is of opinion that the public credit of New Zealand might with advantage be .applied towards enabling settlers, on the security of their land, to acquire advances at a comparatively low rate of interest. Such advances might be made through the Land Transfer Department in sums not exceeding L2OOO to anyone individual for aperiod not exceeding 10 years, the rate of interest being 4| per cent, per annum ; the amount of such advance not to exceed one half of the value as fixed under the Property Assessment Act. The mortgagor to be entitled to cancel the morbgage at any time on payment of the principal and interest to date of cancellation. The sole instrument of mortgage should be an endorsation thereof on the certificate of title and its registration in the Land Transfer Office books. The amounts advanced should be paid in New Zealand Government debentures of not less than LIOO each, bearing interest at the rate of 4 per cent, per annum, with a currency of 15 years, principal and interest to be payable either at the Colonial Treasury or Bank of England. The session is now so far advanced that the House may probably be unable to consider or discuss the foregoing proposals at the present time, and even were it otherwise the subject is one of such vast importance in its bearing upon the future prosperity of New Zealand that it may, perhaps, bo well to afford public- opinion throughout the Colony on opportunity of expressing itself upon the question before any definite action is taken. This report will serve so far to ventilate the proposal, and your committee would express a hope that the Executive Government may during the recess prepare a bill dealing with the question upon the lines embodied in the fore gomg tjaggeetitraS) sticb. bill to be submitted to

Parliament at the commencement of next session.— J. Macandrew, Chairman of Advances on Land Committee. Attached to the report is a return showing the amount and number of mortgages outstanding on 31st March 1885 : — . Number. Amount. Mortgages to LIOO, and under LSOB ... ... ... 24,022 L 5,121,793 Mortgages to LSOO, and under L 1000... ... ... 7,866 5,027,883 Mortgages to LIOOO, and - wider L2OOO ... ... (5,631 —