Wairarapa Daily Times. [Established 1874.] SATURDAY, FEBRUARY , 20, 1897. CHEAP MONEYS

Wairarapa Daily Times, Volume XVI, Issue 5564, 20 February 1897, Page 2

Wairarapa Daily Times. [Established 1874.] SATURDAY, FEBRUARY , 20, 1897. CHEAP MONEYS

We gather (com some correspondence recently published in the Tnrmmki fas that the Government is making there, as well as in other parts of the Colony, special efforts lo induce settlers to borrow under "The Advances to Settlers Act." In the Wairarapa we lind that advances which an ordinary Building Society consider an insufficient security are readily accepted by the Government department. At Taratiaki it is said that the Govcrnmenteanvasser is offering advances at the statutory rate, and the borrower is told that at any time he c:m pay off the principal sum by instalments of ;610 or upwards; but lie is not informed that upon such sums as he may pay off he is only allowed four per cent, until the final payment is made, so that upon every £lO paid off he loses one per cent, (or two shillings) per annum, which increases the interest 011 the balance to more than five per cent. Under thisarrangoinenta borrower may find himself ultimately paying ten per cent, rather than live for his 1 advances; he is also bound by a string of covenants printed as a schedule to the Act, which possibly he does not take the trouble to read, but which may some day lvnd liiin, He willingly binds himself to do all that a paternal Governmentdeinands, but some day, when the patornal Government finds it necessary to frown instead of smile on him, lie may realise that be has made a sore bargain. The following illustration of the working 0( a Government loan is given in the columns of our Taranaki contemporaryOn the Ist July, 185)5, a certain settler borrowed £300; 0111 st January, 189(1, he paid £7 10s interest, and 011 Ist July, 180G, another £7los interest; and, having applied to bo allowed to pay off the mortgage, he received notice, dated lGtli July, 1806, that he could do so upon payment of a further sum for interest of £7 8s 6d; making a total, for interest only, of £22 8s Gd 011 the £3OO for one year and fifteen days, or something over seven per cent, per annum. In giving these figures nothing is included for valuation, cost of mortgage, discharge of mortgage, registration fees, and a fee to the Government Advances fo | Settlers Offico for the privilege of paying off, which totalled up to about £i 10s more, or nearly H per cent. This man therefore paid" just about 8f percent, per annum for his loan, and the Government got seven per cent, interest, besides sundr fees.