STATE GUARANTEED ADVANCES.

Otago Witness, Issue 3030, 10 April 1912, Page 29

STATE GUARANTEED ADVANCES.

(From Out Own Cohresfondzkt.) WELLINGTON, April 3. Particulars of the successful career of the State.'guaranteed Advances Department were given to-day to a Poet ro» porter by Sir J. G. Ward, who recalled the fact that, when ho was putting hi 4 scheme for the advances to settlers before the country in the early 9Q's, he made a series of explanatory speeches from Auckland to the Bluff and back to Auckland, and it was most amusing now to recall the dismal predictions that were made ia connection with it. Since the Stateguaranteed Advances Act of 1909 was passed, he went on to say, all loans to local bodies by the Government are made through the office. The money is lent at the same rate of interest at which it is borrowed. Moat of the money is lent at 3A per cent., but as money rates are now higher, loans have recently been granted at 33 per cent. only. Nearly all is lent on a 36i years' term, the instalments of principal and interest for that period being £4 17s 6d per annum for 3i- per cent, loans and £5 Is for 3$ per cent, loans. In no part of the world can local bodies obtain money on such favourable terms a« in New Zealand when the loans are from the Government. In order to show how the department has progressed from year to year, the totals lent during each year since are interestino-. Total advanced to settlers : 1896 £429 122; 1897. £607.305; 1898, £320 563; 1899, £281.540; 1900, £448,985 t 1901." £539,220; 1902. £400.445; 1903, £4BO 055; 1904, £463.815; 1905, £176.005; 1906' £633.452. Total to settlers and workers : - 1907. £773.220; 1908, £1401394; 1909, £1.792,019; 1910, £1,457,472; 1911, £1,612,070 \t present, as required by the act, there not being sufficient funds_ to meet nil applications, preference is being given to those of £SOO and under. Notwithstanding this limitation, last year was a record one in advances, those to settlers Z to February 29 being £2,077,155, and to workers £497,535. If moneys repaid and again advanced are included the gross total lent to settlers, workers, and oans to local authorities amounts to the large sum of £15,515,000. . The nrofits have been considerable, miiSn £12,321 in 1899 to £60,440 in 1911- ~ _. T , i,r„„j These profits, said Sir Joseph Ward, are due to the economy of management and the fortunate circumstance that I was able to obtain large sums of money at a low rate of interest, especially one loan of £1,500.000 at 3 per cent. For some vears to come the interest will rise and higher rates of interest will prevail throughout the world, so that the large profits hitherto made by the department cannot be expected to continue. The losses to March 31, 1911, were only £l5O 3s. There is an internal reserve fund invested with the Public Trustee, which amounted to £176,311 on .March 31. 1911. ~ •, Q . T "The department, said Sir Joseph in conclusion, "is absolutely free from political influence, the granting or refusal of loans being a matter entirely in the discretion of the board, which consists' of the Superintendent, the Public Trustee, the Valuer-General, and two non-members of the Civil Service, the present members being Mr Warburton (late Comptroller and Auditor-general) and Mr Henry Keinber."