INTEREST ON STATE LOANS

Taranaki Daily News, 11 July 1929, Page 13

INTEREST ON STATE LOANS

NO REDUCTIONS AT PRESENT. PRIME MINISTER’S STATEMENT. (By Wire —Parliamentary Reporter.) Wellington, Last Night. In the House of Representatives today, Mr. W. E. Barnard (Napier) asked the Prime Minister whether he was aware that the State Advances Office was charging interest at a minimum rate of 6 per cent., and whether it was intended to continue that apparent increase in interest charges while there was an apparent falling tendency. Sir Joseph Ward replied that the present rate of interest payable on ; State Advances loans was On loans toiworkers, GJ per cent.; on loans (other than redemption of mortgages) to. settlers, 6| per cent.; on loans to settlers for the redemption of mortgages, per', cent. AH three rates, he said,-.weJ.e subject to a rebate of J per cent, for prompt payment. The rates were lower '; than those charged for loans arranged! outside the State Advances Department, especially was that so in the case of all loans borrowed on the security of land held under leasehold tenures. It was generally known that outside financial institutions did not seek such security, and where they did a higher rate than was accepted on the security, of freehold lands was demanded.

The rate of interest chargeable on loans was determined by the State Advances Board, with the approval of tho Minister of Finance, and was governed by the rate payable on loans raised from time to time plus loan flotation expenses and the cost of the redemption of loan charges. When the occasion arose the question of an alteration in the rate of interest would be duly considered by the State Advances Board in accordance with the. provisions of the State Advances Act.