SETTLING SOLDIERS

Southland Times, Issue 19837, 7 April 1926, Page 13

SETTLING SOLDIERS

FINDING THE FINANCE. GOVERNMENTS DIFFICULTIES. Some of the difficulties facing the Government in financing soldier settlers were reviewed by the Minister of Lands (the Hsn. A. D. McLeod) in replying to a deputation from the /Returned Soldiers’ Association which waited on the Government recently at Wellington. It was stated to Ministers present (Messrs Coates, McLeod and Rolleston) by Mr W. Perry that there were cases of soidiera who had sold their farms in 1915 ai.d 1916 to go to the war, and who, when tiicy returned had found the finance themselves to settle on the land without any assistance from the Discharged Soldiers’ Settlement Department. These men now required assistance to pay off the mortgagees, but it had been found that they could not obtain loans from the State Advances Department. In one case, money had been borrowed from the Public Trust Office, but the State Advances Department refused to make any advance to repay that loan. The anomalous position existed that a civilian who mortgaged his land in 1912 for five years had received the benefit of the Mortgages Extension Act, and after the protection was removed was given preference, as far as obtaining loans from the State Advances Department was concerned, over a soldier who had sold his farm in order to got to the war, and who, on returning, had received no assistance from the State. It was suggested that some means should be provided to enable men such as these to retain their holdings by giving preference to their applications made to the State Advances Office. The only assistance which could be obtained from the Discharged Soldiers’ Settlement Department was in cases where there were no prior mortgages encumbering the land. If preference could not be given to men applying to the State Advances Department, then it was asked that the Discharged Soldiers’ Settlement Act should be reopened for the benefit of men who had put their own money into land on returning from the war, and who were now in difficulties. In regard to houses, it was asked that where a man who had borrowed money from the Discharged Soldiers’ Department was transferred to another town through no fault of his own, and had to sell his home, he should be entitled to make application for a further loan. It was recognised that soldiers should not be able to sell their houses to civilians unless the purchasers paid cash over the mortgages. This would tend to keep the money in the Discharged Soldiers’ Settlement Account. The Prime Minister said there was no earthly reason why the Public Trust Office could not renew loans where it had advanced money. The question of whether a man should have preference in getting a mortgage from the State Advances Office had not been considered. USELESS IN PRACTICE.

The Hon. A. D. McLeod said the provision that not more than £2500 should be advanced to soldiers on the land by way of assistance was found to be useless in practice. The Department had before it numbers of cases where men had put in £5OOO and £6OOO of their own money, apd who today were just about “out.” Only to-day he had seen a man w’ho had put £16,000 of his own money into his land, and there was apparently no means of saving him. None of the lending departments of the State, even if they had the money available, could save that sort of man. What was being done in cases of difficulty was to make advances, where possible, on stock. The department found that in many cases the stock was free, or partially free, and where such advances were made it left a balance with which a man could meet interest on his liabilities. The whole question of adding to the Discharged Soldiers’ Settlement Fund was a matter for the Government. The Minister quoted the following figures to show the position of the Discharged Soldiers’ Settlement Account as at the end of February last:— £ Total advances .. 22,494,000 Balance at April 1 .. .. .. 178,000 Repayment of advances, interest, etc., 1,462,546 Advances made and other miscellaneous expenditure .. 722,493 The Minister said that there was a total of over £900,000 that had to be made good for interest on loans. It was assumed that they would finish up the year with a balance of £35,000 in the account. That left’ practically no margin at all for assisting men outside the account. Loans authorised during the past .year were as follows: £ Advances for stock, mortgages, and new advances 203,000 Purchase and erection of dwellings 54,117 Small farms and market gardens 28,783 Total 286,676 The Department was now making advances to men with 50 per cent, disability so they might go in for market gardens. POSTPONEMENTS THE TROUBLE. A great deal of the difficulty as regards finance was that postponements had to be made for as much as from five to ten years. There was a very large accumulation of money standing to the debit of postponements. Until those moneys came in, he saw very little hope of opening up the account for fresh advances, unless new sums were brought into it. On moneys borrowed from the Consolidated Fund or from surpluses 44 per cent, was charged, but on other money which they might borrow they would have to pay 51 per cent., perhaps more, and as a consequence they could not make advances at the same rate as they were doing now. He thought it was much better to try to save those men who were already- on the land rather than to put more men on. The question of housing, said the Minister, was a difficult one. Theoretically, it was correct to say that a soldier’s house should not be sold unless the cash advanced on it was returned to the Department, but if that were followed out in practice there would be no sale of houses at all. The Prime Minister: “Except where there are bona fide transfers, or where a man has lost his health.” Mr Rolleston: “These transfers have to be approved by the Commissioner of Crown Lands. That is a safeguard against speculation.” Mr McLeod remarked that in fully 90 per cent, of the cases brought before him in which it was desired that sales should be allowed, a doctor’s certificate was stated to' be available to support the transfer. (Laughter). Either a wife or a child, or somebody had to be shifted. If a man was held up unnecessarily he commenced to drift back in interest payments. The question of not permitting a man to sell except through the Attorney-General was adopted as a matter of policy, but in practice they found that this meant a perpetual moratorium for soldiers. THE SECOND MORTGAGEES. There were quite a number of men wfcn would pay, if not the whole, then a proportion of their second mortgages, but who refused to pay anything, so they had now decided that after giving three or six months’ notice the Attorney-General could empower a sale in order that the second mortgagee might be paid. There were a number of second mortgagees who were getting 6 and 6| per cent, on their money and the Government considered that that was good interest. ’ For that reason the Government was maintaining the protection. Some second mortgagees, however were trying to get round the position by raising their interest to 8 per cent., when their five-year period was up. It was fairly hard to fight against that, especially when 8 per cent, could be obtained on second mortgages to civilians. Then again, inducements were often made to bring about a sale, and there were any amount of cases where undoubted collusion was being exercised between a soldier and his mortgagee to force the Government’s hands to lend money through the Advances to Settlers’ Department. The Government was doing all it

could with the finance available to tide men over the difficult periods, but in some cases the position was so bad that nothing at all could be done. In regard to applications made to the State Advances Department by returned soldiers, although direct preference was not given, everything was done to facilitate the application. The Prime Minister said that he knew of no case where a mortgagee had not met a man in the event of it being understood that money would be forthcoming from the State Advances Office. Mr McLeod said that where a second mortgage took action under a forced sale the Government demanded that all payments under the first mortgage should be repaid immediately. The soldiers were being protected in every possible way. Mr Coates: “Our difficulty is with the mortgagee. He complains bitterly of the attitude we have adopted. It may not be strictly fair, but we have to think of these soldiers.” Mr Perry remarked that it was just a question whether or not some of the regulations designed to protect the soldiers were not acting as a “boomerang.” Mr Coates: “We have to be very careful not to damage the soldiers’ credit as a class. If you start interfering it very often has an undesired effect.”