STATE GUARANTEED ADVANCES.

Wairarapa Daily Times, Volume LXI, Issue 9698, 1 November 1909, Page 3

STATE GUARANTEED ADVANCES.

The New Zealand State Guaranteed Advauces Bill, which has been read a second time iv the House of Representatives, gives power to the department to lend £2,500,000 per anuum.

In explaining the provisions of the measure, Sir Joseph Ward stated that JL within the uext twelve or eighteen mouths the department would have an income from returns and interests of quite £1,000.000. There was a maximum of £3000 to advances made by the department, which would set free the Government Life Insurance Department and Public Trust Office to advance the larger sums which were required by a different class of client. The operations of the department would prevent an abnormal rare uf interest being charged, and there ought to be a lower rate of interest upon mortgages. We were competing with our products in centres wiiere money was exceedingly cheap, therefore it was necessary that our producers should have similar advantages. The amount fixed to be advanced this year to local public bodies was £500,000. which was ascertained to be the total amount required by them during that, period. One of "the troubles of the present system of loans to local public bodies was the inadequate maximum, which strangled them in their desires to carry on operations. Ttiey liaii been obliged to ask for a loan, and come along in two or three years for another loan, though their works would have been finished earlier had

an adequate loan been at first avail-

#able. The fullest amount possible to lead tinder the present system was £250,000 per annum, but uuder [the Dew Act there was no limit, provided there was proper security. A county council would under the new Act have no difficulty in raising £('O,OOO, or a municipality £100,000. There was only room for one system, and the new method was incomparably the hetter. A.ll the money was coming from England, but under the uld system, the smaller amounts had to be raised here. Local authorities might fix their owu terms for repayments by paying back the principal quicker than was required by the schedule. Advances to assist mining development were provided for under Government guarantee and no doubt the local public bodies could give collateral security. The Public Trustee was the custodian of the sinking funds, and could re-invest them. This separate control of securities aud sinking fund gave the scheme stronger position than if these matters were in the hands of the Advances Board. A change had been made in the constitution of the latter authority, an additional outsider being provided for. He was warranted in # saying that all the money required for the scheme could be obtained in London at per cent. A short time ago he could "have obtained the whole of the money at, 3 per cent. The Prime Minister proceeded to explain in detail the various portions of the Bill. With the proposed trausfer of authority and responsibility to the State Advances Department there would require to be also a transfer of the whole of the assets from the existing departments. It was very desirable to have the whole under one system and one heading. As for the advances to local public bodies, it was proposed to make a small charge of y 2 per cent, to cover administrative expenses. This seemed to be very necessary. The schedules of the Bill were of some importance. Under them exactly the same system as was now applied to settlers and workers was to be applied to local bodies. In the course of his reply to discussion on the proposals, Sir Joseph Ward stated tnat since the debate commenced he had had prepared a return showing how large areas of laud in New Zealand had been cut down to within the £40,000 limit. In one

case a property of 18.000 acres owued

by one person had been cut up and #sold to twenty-three persons; in another instance a 5000-acre estate was sold to twenty-two persons, and an estate of 4400 acres had been cut np among forty-eight persons who obtained the fee simple.