Wairarapa Standard Published Tri-weekly, Price 1d. WEDNESDAY, JUNE 23, 1886. Land Mortgage Banks.

Wairarapa Standard, Volume XIX, Issue 1848, 23 June 1886, Page 2

Wairarapa Standard Published Tri-weekly, Price Id. WEDNESDAY, JUNE 23, 1886. Land Mortgage Banks.

During last session of Parliament the advances on land committee reported in favor of the Government granting loans to farmers on freehold security, at a low rate of interest. It appears, however, by the recent Financial Statement that the Government are not prepared, at present, to adopt this suggestion, although they may do so at some future period. In the meantime the Government have procured some information about the working of land mortgage banks in the Swiss Cantons, some points of which we now give for the information of those who are interested in the subject. The Berne Land Mortgage Bank is tb e only one of its kind in Switzerland possessing a State guarantee, and is therefore the most important. Tbe original capital of this Bank was 7,000,000 francs—a franc representing lOd (tenpence) of English money. The operations of this bank comprise (1) loans on mortgage and land ; (2) advances made upon debentures secured on mortgages on real estate ; \3) the receipt on deposit of funds at interest. The Bank lends money on mortgage of real property to the amount of two thuds—and in exceptional oases to three fourths of the value. It devotes special atteution to the small farm proprietors in want of small loans. There are a formidable amount ef official forms to be gone through before a loan is granted. Vie have waded through all the dreary and dull mass of papers laid before the House on this subject, and have come to the conclusion that the system, if adopted m this colony, would require to be much simplified and modified before it would work well. An official of this Bank writing from Berne thus sums up tbe main features of this system : We grant loans on mortgage—on land for about two thirds of tbe estimated ground tax value ; on bouses, for about half of the fire insurance amount on buildings. The borrowers have to pay 4| per cent interest, at present, per annum on tbe amount of tbe loan, besides | per cent ofi the loan every year—in all, 5 per cent per annum. When applying for a loan, a description of the object of mortgage by a notary has to be handed in, which is then thoroughly examined, if ratified by the “ Greffier du Tribunal ” of the respective locality. When everything is found in order, then tbe loan is granted by our directors, who meet once a week to discuss business in hand. Ours is, I believe, the only mort« gage bank in Switzerland with State guarantee, the others being all private concerns. We cannot lose anything, as the commune wherein the object of mortgage is situated has to take over the debt should any borrower become uuable to continue his annual payment. To obtain cash to pay the loans, besides the subsidy from the Cantonal Government, we issue bonds for deposits, at present at the rate of 3| per cent for sis iftonths certain, and savings-banks books at 3} per cent, the former with yearly coupons. For tbe lust lew years we have always had too much money flowing in.