STATE ADVANCES CORPORATION OF NEW ZEALAND REPORT AND ACCOUNTS FOR THE YEAR ENDED 31st MARCH, 1950

Appendix to the Journals of the House of Representatives, 1950 Session I, B-13

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1950 NEW ZEALAND

STATE ADVANCES CORPORATION OF NEW ZEALAND REPORT AND ACCOUNTS FOR THE YEAR ENDED 31st MARCH, 1950

Laid before Both Houses of the General Assembly of New Zealand Pursuant to Sub-section (2) of Section 43 of the State Advances Corporation Act, 1934r-35, and Subsection (2) of Section 42 of the State Advances Corporation Act, 1936

The Right Hon. the Minister or Finance, Wellington. We have pleasure in submitting the Balance-sheet and Revenue Accounts for the year ended 31st March, 1950, together with a report on the administration for the year, in accordance with the provisions of subsection (1) of section 43 of the State Advances Corporation Act, 1934-35.

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BOARD OF MANAGEMENT : T. N. Smallwood, 0.8. E., Chairman. B. C. Ashwin, C.M.G."! D. Barnes R. G. Macmorran J CHIEF ADMINISTRATIVE OFFICERS : F. E. Mitchell, General Manager. K. J. Caverhill, Assistant General Manager. J. D. R. Wood, Secretary. H. M. Caselberg") c . . TT 1 B. C. McCabe Supervising Valuers. C. E. H. Ball, Office Solicitor. W. G. Dent, Chief Accountant. L. E. Brooker, Architect and Chief Property Supervisor. AUDITORS : G. D. Stewart. R. C. Burgess. BANKERS : Reserve Bank of New Zealand and Bank of New Zealand.

PART I-GENERAL In last year's report statistics of the Corporation's business over the previous fifteen years were supplied, and similar comparative statements are furnished this year as a means of illustrating the progress that has been made, and the effect of wartime and post-war conditions on such progress. The table following shows the number of loan applications received, firstly, in the four years following the establishment of the Corporation in 1935, and, secondly, in the four years ended 31st March, 1950. As has been customary in the past, the figures have been summarized under classified headings :

The figures disclose a reduction of 744 in tlie total number of applications received under all headings as compared with the previous year, a trend which has been in evidence since 1947, and indicates a tapering off of rehabilitation requirements, particularly in respect of furniture and tools of trade applications.

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Year. Urban. Rural. Tools of Trade: Furniture. j Business. 1 I Miscellaneous. 1 , Total. 1936* 1937 1938 1939 1947 1948 1949 1950 . 2,098 5,049 3,493 4,993 8,678 7,150 6,848 6,794 i 2,033 2,681 1,364 1,592 2,485 1,696 1,681 1,685 j 210 283 168 76 8,411 8,243 7,678 1 2 j 636 2,392 2,489 2,402 65 26 27 77 4,131 7,730 4,857 6,585 22,676 19,958 19,456 18,712 * For seven months only.

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It will 'be seen also that urban loan applications remain at a consistently high level .and are 1,745 in excess of the 1937 figures. With the introduction of the present Government's new lending policy and the -suspensory loan scheme, indications are that the number of applications under this heading will show an increase in 1950—51. Further ■comment on this phase of the matter is made later in this report. Applications for loans on farm properties have been remarkably constant since 1948, notwithstanding the restricting influence of section 51 of the Servicemen's Settlement and Land Sales Act on sales of single-unit properties. It is true that there are still many ex-servicemen awaiting settlement on farm properties, but it is equally true that there are also many rural workers and farmers' sons who are not ex-servicemen who cannot for .much longer be denied the opportunity of obtaining properties which may come on the market for sale. The contention expressed in last year's report that sufficient self-contained economic farm units are not available to satisfy the demand is confirmed by the fact that applications received in respect of farm properties have in the last three years become stabilized at a fairly low level. Recourse will inevitably have to be had to an intensification of land-development, either by the' State of by individual settlers, and a closer study of farming methods and technique particularly in relation to marginal units, will be required if all those seeking farm lands are to be satisfied. The oall on loan funds for rehabilitation purposes continues to be heavy, but it has been possible during the past year to meet civilian requirements to a greater extent than for some years past, and no difficulty has been experienced in meeting the normal requests of this class of applicant, particularly where the loan-moneys are required to assist in the erection of new homes. With the extension of the loan limits the demand in this respect is already increasing. Repayments from existing borrowers have, as in the past, provided a fairly large proportion of the funds needed to meet loan requirements. Treasury was, however, called upon to provide capital moneys amounting to £5,600,000, a reduction of £600,000 ■on the previous year. Climatic conditions have generally been favourable throughout the Dominion and production has been uniformly high. North Auckland experienced a dry spell in the late summer and autumn, but investigations have shown that dairy production for the season is likely to be very little below that of the 1948-49 season, which was a record one for the district, and will certainly be above the average for some years past. Settlers most severely affected were those who had taken up farms during the previous year and had not become fully established before the dry spell. Apart from these few, the great majority were able to maintain satisfactory production ; and with sufficient rain in the late autumn and a mild winter to date, pastures have made a good recovery. Prices for all types of stock have remained high and wool prices have risen above expectations. The farming community generally has, as a result, had a very successful season ; and we note with pleasure that a large number of ex-servicemen's accounts are showing substantial trading surpluses. The Corporation has continued to encourage its borrowers to use these revenue surpluses to build up their asset reserves by reducing their mortgage liabilities, and as far as possible effecting improvements which normally would have to be financed by further loan capital. The volume of transactions, as evidenced by the numbers ol cheques and receipts issued, shows an increase over past years, and these have reached a new record. Cheques to the number of 103,000 involving total payments of £22,071,000 were issued during the year, whilst the number of receipts issued totalled no less than 1,625,000 involving £22,485,000, thus making a total cash turnover in payments and receipts of £44,556,000.

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Increasing pressure of work is resulting from the gradual replacement of long-standing well-secured mortgage accounts, which present few, if any, administrative problems, by loans with a very slender margin of security which are placed on a monthly or quarterly repayment basis. The following statistics show the number of loans approved during the year. Corresponding figures for the preceding year are given in parentheses.

Statistics for Year Ended 31st March, 1950

It will be observed that although there is still a large volume of business transacted, in the form of rehabilitation business and furniture loans, lending on the security of farm and residential property continues to represent the major portion of the Corporation's business. The table following shows the operations in this respect for the year under review, together with the aggregate of such loans authorized since the establishment of the Corporation in 1935.

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Classification. Loans Authorized. Number. 1 Amount. Farms Stock Houses Industrial Business Furniture Tools of trade Miscellaneous Totals 1,013 (1,031) 104 (49) 5,088 (5,590) 8 (7) 1,414 (1,373) 7,283 (8,039) 62 (134) 109 (45) £ £ 5,115,801 (4,567,640) 105,362 (54,118) 6,020,694 (6,642,354) 1,034,090 (418,000) 910,091 (933,151) 678,292 (746,101) 1,838 (4,848) 17,434 (7,848) 15,081 (16,268) 13,883,602 (13,374,060)

Period. Applications Received. Loans Authorized. Number. Amount. Number. 1 Amount. During year ended 31st March, 1950 — Farms and stock Residential Totals During period 1935 to 1950 — Farms Residential Totals .. .. ■ .. 1,655 6,794 | £ 6,043,255 8,555,533 1 1,117 5,088 i £ | '5,221,000 6,021,000 8,449 14,598,788 6,205 11,242,000 20,457 63,576 58,807,000 67,676,000 11,995 48,008 37,701,000 50,297,000 84,033 126,483,000 60,003 87,998,000.

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The loan [authorizations for 1950 as shown above are classified hereunder to indicate the nature and purpose of the loans—i.e., whether within or in excess of the normal two-thirds lending basis, whether for purchase or erection of dwellings, or for the refinancing of existing mortgage liabilities :

Authorizations for Year Ended 31st March, 1950, Classified Under Purpose

It will be noted that of the total number of residential loans authorized in 1950, over 43 per cent, were for the erection of new dwellings. New loan accounts opened during the year totalled 15,601, whilst 9,487 were repaid in the same period. The total number of loan accounts under all headings being administered at 31st March, 1950, is given in the following table Number of loan accounts as at 31st March, 1949 .. 1 .. 98,790 Less repaid during the year .. .. .. 9,487 89,303 Add new loan accounts opened during the year .. 15,601 Number of loan accounts as at 31st March, 1950 .. .. 104,904 representing a net increase of 6,114. The figures quoted in the table do not include the large number of housing and other agency accounts under administration by the Corporation. There are over 34,000 housing accounts alone, practically all of which are on a fortnightly payment basis, resulting in accounting operations of considerable magnitude. Some idea of the volume of transactions involved will be gained from the following statement, which shows the number of accounts and the book value of assets at the 31st March for each year since 1935 :

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Farms. Residential. Purpose. Civilian. Rehabilitation. Civilian. Rehabilitation. Number. Amount. Number. Amount. Number. Amount. Number. Amount. Erection — Normal Special £ £ 100 216 £ 119,310 313,920 1^886 £ 2,590,187 Purchase— Normal Special 24 10 74,465 26,190 931 4,712,372 142 133 117,125 142,150 2^439 2,292j 502 Refinance— Normal Special 11 1 50,990 4,080 17 57 ° 055 52 2 46,890 3,425 30 32 j 995 Other Purposes— Normal Special 5 68,649 2,545 14 117 965 20 1 O O r-H (M "67 51*490 Supplementary (interest free) R.I.C., Part III (stock and chattels loans) Totals 17 18,825 (5) 87 1,490 86,537 (1,918) 265,270 68 245,744 1,049 4,975,419 666 788,250 4,422 5,232,444 Note. —Special loans are those granted in excess of the normal two-thirds basis.

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This table includes under, the heading " Balance-sheet Assets " various miscellaneous items not appropriate to the succeeding table which is designed to show primarily the capital assets under administration. * Diying this financial year the Corporation took oyer from the Lands Department the administration of the advances made under the authority of the Discharged Soldiers Settlement Act, 1915, and amendments. t In previous financial years the value of the land acquired for housing and not vet built on was included in the assets of the Housing Account administered by the Corporation, bi4t since .1943 is included in the accounts of the Ministry of Works,

Statement Showing Number of Accounts and Total Balance-sheet Assets During Period 1935-50

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Year. Corporation. Housing. Agency. Grand Total. Number of Accounts. Balancesheet Assets. Number of Accounts. Balancesheet Assets. 1 Number of Accounts. Balancesheet Assets. J Number of Accounts. Balancesheet Assets. Rural. Urban. Local Authorities. Total. : £ £ £ ■ | £ 1935 .. 16,325 35,459 2,850 54,634 41,255,701 54,634 | 41,255,701 1936 .. 15,339 34,582 1,882 .51,803 43,217,990 51,803 43,217,990 1937 .. 24,442 43,768 1,986 70,196 56,589,459* 949 853,563 71,145 57,44-3,022* 1938 .. -23,767 43,858 2,128 69,753 58,453,775 1,505 2,581,565 11 45,636 71,269 61,080,976 1939 .. 22,529 45,275 2,029 69,833 60,245,891 4,177 6,654,479 11 43,878 74,021 66,944,24-8 1940 .. 21,704 44,778 2,081 68,563 59,769,067 7,469 [11,917,958 11 43,838 76,043 71,730,863 1941 .. 20,748 43,106 2,063 65,917 57,159,712 11,463 17,411,774 1,149 207,480 78,529 74,778,966 1942 .. 19,936 42,033 2,048 64,017 56,313,791 14,795 21,443,206 1,958 359,619 80,770 78,116,616 1943 .. 19,149 39,524 2,039 ■60,712 56,249,088 16,225 122,737,593 ! 2,302 473,750 79,239 79,460,431 1944 .. 18,241 37,292 2,013 57,546 |56,137,810 16,919 21,306 ,031f 3,840 633,437 78,305 78,077,278f 1945 .. 17,786 36,326 1,993 56,105 55,998,932 18,482 24,106,850 7,407 : 1,184,982 81,994 81,290,764 1946 .. 18,094 36,107 1,948 56,149 56,299,784 21,398 128,840,568 ! 14,055 ! 2,111,053 91,602 87,251,405 1947 .. 18,911 38,181 1,889 58,981 60,839,969 23,817 864, 775 22,804 3,823,699 i105, 602 98,528,44-3 1948 .. 19,307 40,780 1,600 61,687 68,107,720 26,048 39,480,749 28,107 4,708,769 ;115,842 112,297,238 1949 .. 20,315 43,341 1,205 64,861 75,057,449 30,548 46,512,426 35,384 5,755,589 130,793 127,325,464 1950 .. 21,368 45,219 . 997 67,584 81,425,949 34,798 54,596,092 38,460 6,134,633 [140,842 142,156,674

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It will be noted that the number of accounts under administration now totals 140,842, and, as in past reports, these have been classified in the table below to show the nature of the investments and the relative amounts thereof : Accounts Administered by Corporation Number of Principal Accounts. Investment. Mortgage investments — £ Urban .. .. .. -- •• 45,219 38,401,034 Rural 21,368 36,640,712 Loans to local authorities .. .. .. .. 997 4,362,537 Housing Account — Dwellings let .. .. .. .. .. 34 ' 267 1 52 34-5 472 Shops, halls, and communal garages .. . - 214/ Dwellings sold.. .. .. .. 155 84,960 Loans to local authorities .. .. .. 102 993,761 Loans to employers .. .. .. .. 18 58,421 Rural Housing Act: Loans to local authorities.. .. 42 127,959 Advances under Rehabilitation Act, 1941 — Furniture, tools of trade, business, and miscellaneous 37,136 3,541,150 Interest-free supplementary loans .. .. .. 1, 935, 177 Other principal agencies— Agriculture Emergency Powers Act, 1934 .. 7 18,628 Farmers' Loans Emergency Regulations 1940 . . 15 39,973 Public Works Department hutments rented to farmers 35 10,463 Rural Housing Scheme, 1944 .. .. .. 35 3, 623 Timber workers' housing— Levies accounts .. .. .. .. 619 \ Rental accounts .. .. .. .. 103 J Miscellaneous rentals .. .. .. .. 510 Totals .. .. .. ..140,842 £138,931,658 The total of £138,931,658 represents an increase over the past year of £13,507,458. During the year there has been further progress made in clearing up the investment accounts in respect of securities previously administered as mortgagee-in-possession and which had been taken over from Departments on the establishment of the Corporation. It will be seen from the table hereunder that losses written off against reserves in respect of these accounts amounted to £138,445 for the year and bring the total written off up to £2,999,219. A substantial part of this last-mentioned amount was in respect of mortgage adjustments under the Mortgagors and Lessees Rehabilitation Act, 1936. No losses are shown for the year in respect of new investments made by the Corporation since 1935, and the total written off in this section for the past fifteen years amounts to only £7,577.

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Losses under the rehabilitation scheme are shown later in this report.

Interest Rates The Corporation has maintained the rate charged on loans granted at 4| per cent., which allows little margin to meet management and other overhead expenses. This rate is competitive on present market conditions, particularly for long-term loans, and having regard to increased costs of administration. The Board considers it very satisfactory that it has been possible to keep the charge to clients at this moderate level. Lending Policy With the advent of the present Government following the general election in December last, and following Government policy, extended loan limits have been brought into operation and loans to erect houses may now be obtained up to a limit of £2,000 (inclusive of any suspensory loan) and subject, of course, to normal requirements as to type of construction, value, &c., being complied with. Civilian applicants are required to contribute not less than 10 per cent, of the cost of the proposition, but eligible exservicemen may obtain loans up to the full approved cost, but not exceeding the loan limit of £2,000. Evidence is not lacking that this increase in special loan limits is having the desired effect of encouraging home-seekers to build new houses rather than to purchase existing dwellings. The new basis of lending did not, however, come into operation until late in the financial year, and it will be some months yet before the full effect of the scheme is evident. It must not be inferred that cost alone is the determining factor in dealing with loan applications, the personal factor of the applicant and the economic value of the project being most important. Suspensory Loans As part of its policy to encourage private-house building in both town and country, the Government has introduced a suspensory loan scheme and placed with the Corporation the responsibility for its promotion and administration. As a secondary, but by no means unimportant, objective the scheme will be specially helpful to those who through increased building costs, would be unable to build at to-day's price levels if

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Losses Written Off in Respect of— Amounts Written Off. For Year Ended 31st March, 1950. Total From 1935 to 1950. Loans approved prior to 1935— Farms Residential Totals New Corporation loans since 1935— Farms Residential Totals £ s. d. 5,686 19 9 132,758 9 5 £ s. d. 2,338,631 5 2 660,587 16 9 138,445 9 2 2,999,219 1 11 7,192 1 9 385 16 3 7,577 18 0

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they had to rely on normal lending facilities. Certain conditions have, of necessity, been imposed, but they are fair and reasonable, and are not such as to prevent the genuine home-builder from participating in the scheme. The loans are available only in respect of dwellings the erection of which commenced on or after Ist December, 1949, and which are intended for the permanent occupation of the applicant and his family. In the case of a house erected on a farm property, occupation by a worker employed on the particular farm is accepted as complying with the residential requirement. The suspensory loans are not available to applicants who already own suitable houses or who have recently disposed of such properties at enhanced values. The present intention is that the scheme will operate for a period of three years from Ist December, 1949, and is available to civilians and ex-servicemen alike, and irrespective of the source from which the balance of the cost of the house is being procured. The approved cost of the house, however, must not exceed £2,000, although special consideration will be given to the needs of applicants with three or more children. The amount of the suspensory loan is 10 per cent, of the approved cost of the dwelling, with a maximum of £2OO. Loan offers are provisional only and subject to review when the dwelling is completed in accordance with the approved plans and specifications and the final cost is known. Any unauthorized departure from the plans or contract as originally approved may involve amendment and (possibly) cancellation of the offer. Security is taken by way of mortgage, but, provided the conditions are fully complied with, no interest will be charged and the loans will be written off after a residential period of seven years has elapsed. It was not possible to place the scheme in operation until March, and it is therefore too early to offer any worth-while comment on the progress of the scheme, which must be judged not by the number of loan offers made, but by the increased number of dwellings •erected as a result of the additional facility provided. Rural Intermediate Credit (Stock) Loans The Rural Intermediate Credit Amendment Act, 1946, abolished the separate account established under the original Act and amalgamated the system of lending for farming purposes (mainly secured on stock and plant) with the Corporation's normal lending operations. This did not, however, close the avenues available to farmers desirous of obtaining finance against the security of their stock and plant on short-term conditions. The demand for loan accommodation in this way is not heavy, the majority of applicants being desirous of consolidating their borrowing in a long-term loan from the Corporation on the, security of farm lands, supported, where necessary, by collateral security over stock. Nevertheless, 104 stock loans were granted by the Corporation during the year (a decrease of 2 as compared with the preceding year) involving a capital outlay of £105,362. In addition, 60 loans involving £37,272 were granted to farmers on applications through Rural Intermediate Credit Associations, thus bringing the total stock loans granted to 164, amounting to £142,634, as against 140 loans involving £137,453 in the previous year. Whilst prices for primary products remain at their present high level it is not anticipated that there will be any great demand for short-term finance, most farmers being able to meet their immediate requirements from revenue or by way of moderate advances through the usual commercial channels. Rehabilitation Agency : General As agent for the Rehabilitation Board the Corporation has continued to administer loans granted to ex-servicemen, and to investigate new applications and provide the various Loans Committees with the data necessary to enable them to arrive at fair

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decisions based on the merits of each proposition submitted. Applications which involve unusual features, such as doubtful economic farming propositions requiring specialized knowledge, often necessitate detailed investigation and consultation with the local Committees appointed for the purpose. In general, however, the work has been handled smoothly and expeditiously. A steady flow of rehabilitation loan applications is being experienced at all Branches of the Corporation. Full co-operation has been forthcoming, as in the past, from the various Departments and Committees associated in this work, and it is pleasing to note that the large majority of men assisted have taken full advantage of the help given to them, and in these cases the purpose of rehabilitation can be said to have been achieved. It is, of course, inevitable that in a scheme of such magnitude a certain number will be unsuccessful, but the percentage of failures has so far been low. This is illustrated by the table given later. The losses have in the main resulted from failures in businesses established with rehabilitation loans, and have mostly arisen as a result of the ex-serviceman being insufficiently experienced in the line of business he elected to follow, or of his being temperamentally unsuited to business management. Many of them, whilst good workers and tradesmen, revealed lack of training and experience to the degree required to ensure their success as businessmen on their own account. The Corporation has continued to help and advise, and has not hesitated to seek the assistance, and gladly acknowledges the help, of experienced men in the commercial field. As in past reports, a list is submitted hereunder illustrating in a condensed form the various types of business for which rehabilitation loans have been authorized. It does not purport to be a complete classification, and we are satisfied that a full, survey would show that more than 250 different types of business have already been handled. It is interesting to note, however, that the various types of transport still appear to have a strong attraction. Classification of Business Loan Authorizations Number. Total. Number. Total. £ £ Butchery .. •• ..188 154,427 Taxi, service ear, and transport 1,652 905,135 Grocery and general store .. 616 511,484 Carrier and mail contractor .. 1,249 925,062 Bakery, dairy, refreshment-rooms 401 276,823 Hairdresser and tobacconist .. 112 55,940 Milk-round .. .. ..272 216,430 Bootmaker .. .. 149 46,222 Building trades .. ..697 357,063 Painter and paperhanger .. 235 80,584 Mechanical repairs .. ..418 275,542 Launch and fishing gear .. 11l 73,292 Manufacturing businesses .. 291 192,288 Agricultural contractors .. 428 309,641 Stationery and fancy goods .. 114 83,564 Chemist .. .. .. 28 ;?8,230 Poultry, &c. .. -. •• 42 26,713 Miscellaneous .. .. 674 *161,169 Professional equipment .. 809 369,066 - Radio dealers and electricians .. 202 109,628 . Total to 31st March, 1950 8,727 £5,493,961 Hotel and guest-house .. 39 35,658 _ - The great majority of rehabilitation borrowers are meeting their obligations satisfactorily, but the Board feels it incumbent upon it to again draw attention to the high percentage of furniture and tools of trade accounts in arrear. Every effort is made to bring these accounts up to date, but the fact that these loans are interest free seems to be considered sufficient reason for non-payment. Had they carried an interest charge, to be waived only upon prompt payment of instalments as they fell due, a better record would have been disclosed. The Board finds it very difficult to believe that these arrears are justified in a time of full employment. The work involved in communicating with defaulting borrowers and in subsequent interviews is uneconomic and takes up the time of officers who could well be engaged on more productive work.

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The two following tables give the statistical data relative to the number of accounts in arrear for the respective types of loan

(1) Arrears as at 31st March, 1950, on Farm and Residential Loans

(2) Arrears as at 31st March, 1950, on Other Rehabilitation Accounts

Losses written off up to 31st March, 1950, in respect of loans granted to ex-servicemen are scheduled hereunder :

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Accounts. Arrears. Percentage of Accounts in Arrear. Number. Principal Outstanding. Number. Amount. Farm Residential .. .. ... 8,061 22,109 £ 23,638,303 24,907,044 157 695 £ 31,628 12,800 1-9 31 Totals 30,170 48,545,347 1 . 852 44,428 2-8

Accounts. Arrears. Percentage of Accounts in Arrear. Number. Principal Outstanding. Number. Amount. Furniture .. .. Tools of trade Business Miscellaneous .. .. . . | 32,735 : 239 | 3,637 ! 252 £ 1,561,713 3,598 1,875,795 50,940 3,217 70 469 21 £ 24,987 579 34,007 456 9-8 29-3 12-9 8-3 Totals .. .. .. J 36,863 1 3,492,046 3,777 60,029 1 ; io-2

For Year Ended 31st March, 1950. Total to Date. Number Amount. Number. Amount £ s. d. £ s. d. Farm 15 8,274 16 7 78 24,062 7 6 Residential 2 110 13 4 5 | 341 J .5 4 Totals 17 8,385 9 11 83 ■ 24,404 2 10 £ s. d. £ s. d. Business 25 7,794 1 0 104 19,197 12 0 Furniture 27 568 6 3 85 2,492 19 11 Tools of trade 2 1 13 0 20 201 2 6 Miscellaneous ... 2 20 6 10 3. 34 6 10 Totals 56 8,384 7 1 212 21,926 1 3

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Rehabilitation Loans Repaid There has again been a large increase in the number of loans repaid, a total of 6,798 accounts having been closed in this way during the year. Of this total, furniture loans repaid account for 4,362. The table below shows the number of accounts repaid in the various classifications :

Many of these repayments, particularly of the farm and residential accounts, result from the sales of the properties, and in many cases loans are granted to the purchasers against the same security. Of the 186 farm accounts repaid, 88 come within this category ; and of the 967 residential loans repaid, 375 were accounted for by new loans to the purchasers. The position generally is regarded as very satisfactory, and illustrates a genuine desire on the part of the majority of borrowers to meet their obligations and clear their liabilities as quickly as possible. Preservation and Protection of Timber The policy of the Corporation in encouraging the development of pressure plants for the treatment of non-durable timbers has borne fruit during the year in the large increase in the quantity of pressure-treated timber which is now available to the building trade -and incidentally, to the Corporation's mortgagors. In 1949 the quantity of timber pressure-treated in Auckland was 500,000 ft. greater than the amount treated in 1948, whilst 750,000 ft. were treated in the five months of the year during which the new plant at Marton was in operation. This plant supplies treated timber to Palmerston North, Marton, Wanganui, New Plymouth, and adjacent towns. A plant has been in operation in Christchurch for some time, and a small plant began operations in Wellington at the end of the year. It is hoped that in the fullness of time pressure impregnation of nondurable timbers will be available throughout the Dominion, when the less desirable dipping method of wood-preservation will no longer be necessary. Termites Act, 1940 As the work proceeds and further knowledge is gained of the termite problem, its long-term nature becomes increasingly clear. As an instance of this, it may be pointed •out that infestations of Australian termites have recently been discovered in areas which had been inspected approximately eight years ago in the early stages of the campaign without any signs of the insects then being found. What is described as the spread of

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Accounts Repaid Total Number During Year Ended Repaid to 31st March, 1950. 31st March, 1950. Farm 186 " 368 Residential 967 2,409 R.I.C. (stock) 45 138 Business 1,011 3,557 Furniture 4,362 9,323 Tools of trade 182 1,134 Miscellaneous 45 180 Totals 6,798 17,109

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the terniites since control measures began is in many cases merely a development of colonies which were present but too small to be detected at the beginning of the control campaign. In view of the limitations of the basic scientific knowledge of the insects concerned, the degree of control over them which has been exercised by the Corporation may be considered to be satisfactory. It cannot be too strongly emphasized that once an insect such as the Australian termite has become established in any country it is unlikely that complete extermination in all localities will be possible. A campaign designed to control infestations effectively and prevent the spread of the pest as far as practicable will produce beneficial results and is well worth while. During the year the number of properties inspected and of infestations recorded up to 31st March, 1950, is as follows :

The supervision of the imports of Australian hardwoods is carried out by the New Zealand Forest Service in an endeavour to prevent the introduction of further colonies of Australian termites. This extremely difficult task has been made somewhat easier by the availability in Auckland of a pressure impregnation plant in which timber suspected of containing termites can be treated and the termites killed. A similar plant is available for the treatment of sleepers and smaller poles in "Wellington. Although the Corporation is not in direct control of the work of preventing the introduction of further infested timber, it is anxious to co-operate and assist the Forest Service in this work. Staff The Board desires to take this opportunity of once more placing on record its appreciation of the work done during the year. It has received the whole-hearted co-operation of its staff, who have maintained a high standard of efficiency. There has been no easing of the pressure under which all members have had to work in the past few years, and with the introduction of the new lending policy and the projected sale of State houses the indications are that another strenuous year lies ahead. The Board is nevertheless confident that it can rely on its staff to continue to provide efficient and loyal service both to its clients and to the Government, which looks to the Corporation to ensure that its policy is carried into effect. Board Mr. A. D. Park, C.M.G., retired from office as Chairman of the Board during the year under review, and Mr. T. N. Smallwood, 0.8. E., was appointed as his successor.

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Local Body. Properties Inspected, Including Re-inspections: Total as at 31st March, 1950. Properties in Which Infestations Found: Total as at 31st March, 1950. Auckland City Council .. .. New Plymouth City Council .. .. Onehunga Borough Council Mount Albert Borough Council One Tree Hill Borough Council Mount Eden Borough Council Mount Roskill Borough Council 20,937 1,460 1,231 569 1,040 337 669 356 23 111 4 2 7 23 26,243 526

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Balance-sheet During the year there has been an increase of £5,600,000 in loan liability, which is offset by a corresponding increase in mortgage investments. The actual new investments during the year totalled £11,784,000, and of this £6,184,000 was found from principal repayments, a normal procedure which is a feature of lending on instalment mortgage. The General Reserve Fund shows an increase of £288,589, and in terms of the statutory obligation to keep the Reserve Fund fully invested in approved securities, there has been a corresponding increase in the investment in Government and local-body securities. There is an increase of £473,540 in sundry creditors, and this is almost entirely represented by amounts due to the Lands Department in respect of farm lands on which servicemen have recently been settled and in respect of which the adjustment of accounts has not been completed. It is expected that payment to clear this amount will be effected early in the present financial year. A substantial increase of £246,017 in sundry debtors will be cleared by adjustments with the Housing Account, on behalf of which the Corporation has made substantial payments. The unusually large amounts of the cash balances aggregating £694,216 were held to meet current liabilities—mainly the payments due to the Lands Department as mentioned previously. Revenue Account Total interest receivable this year at £3,136,784 shows an increase of £264,462 on the previous year and is in line with the increase in investments. The contribution from Treasury in respect of interest concessions on rehabilitation loans during the year reached the substantial figure of £541,897. Total management expenses show an increase of only £14,955, which is very satisfactory considering the substantial expansion in business and the increase in salaries and other overhead expenses during the year. As in previous years, no charge has been made against any Government funds for the costs of administering rehabilitation advances made on business, furniture, and tools of trade securities, the cost this year being £102,964. After making full provision for taxation and reserves, a profit of £50,420 (an increase of £10,385 on last year) is being paid to Treasury, representing a return of approximately 5 per cent, on the authorized capital of £1,000,000. T. N. Smallwood, Chairman of Directors. B. C. Ashwin D. Barnes Directors. R. G. Macmorran J

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Revenue Accounts for the Year Ended 31st March, 1950 Interest Account Dr. .£ j Cr. £ Interest on stock and debentures .. .. .. 2,208,455 ! Interest on mortgages and current accounts .. .• 2,414,327 Interest on General Reserve -Fund investments— 1 Interest concessions on rehabilitation advances : Paid from Payable on State's contribution .. .. .. 96,359 j War Expenses Account .. . ■ •• •• 541,897 Credited to General Reserve Fund .. .. .. 83,926 Interest on Government and local-body securities .. .. 180,560 Gross profit transferred to Profit and Loss Account .. 748,044 &U36/784 £3,136,784 Profit and Loss Account Dr. £ Gr. £ £ Management expenses . . .. .. • • • ■ 323,139 Gross profit transferred from Interest Account .. .. 748,044 Administration of rehabilitation advances from War Expenses Rentals : Properties acquired .. . . .. 805 Account (business, tools of trade, furniture, and miscellaneous Less miscellaneous expenses thereon .. .. 407 loans) .. .. .. .. .. •• 102,964 398 Earthquake- damage insurance .. .. .. .. 15,894 Dividends .. .. .. .. •• •• 275 Net profit, transferred to Appropriation Account .. .. 306,720 £748/717 £748,717 Profit and Loss Appropriation Account Dr. £ Gr. £ Provision for taxation .. .. .. .. .. 236,300 Net profit, transferred from Profit and Loss Account .. 306,720 Reserve for Losses: New business .. .. . 20,000 Balance: Profits payable to Treasury .. .. .. 50,420 £306,720 £306,720

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Balance-sheet as at 31st March, 1950 Liabilities £ Assets £ Authorized capital .. .. .. .. .. 1,000,000 Mortgages and accrued interest .. .. .. .. 74,862,169 £ Securities in course of realization .. ... .. 69,492 Stock and debentures .. .. .. 70,322,590 Advances on current account and accrued interest .. .. 35,570 Accrued interest .. .. .. 362,437 Government and local-body securities and accrued interest .. 5,413,438 70,685,027 Office furniture, equipment, and motor-vehicles, at cost, less General Reserve, including (a) £2,753,164 repayable to the depreciation .. .. .. ~ .. 38,697 State under section 35 of the State Advances Corporation Act, I Current assets—■ £ 1934-35; (b) contribution from War Expenses Account of ! Sundry debtors .. .. .. .. 312,366 £1,013,637 in respect of rehabilitation advances .. .. 5,339,301 Lodgments in transit, cash in bank and on hand .. 694,216 Specific reserves— 1,006, 582 Reserve for losses— £ Ex-State .. .. .. .. 2,264,382 New business .. . . .. 380,000 Investment Fluctuation Reserve .. 122,198 2,766,580 Provision for taxation .. .. .. .. .. 236,153 ! Sundry creditors .. .. .. .. .. 1,252,108 Liability to the Crown— Surplus for year .... . . .. 50,420 Interest payable on State's contribution to General Reserve .. .. .. .. .. 96,359 146,779 £81,425,948 £81,425,948 W. G-. Dent, 8.C0m., F.R.A.N.Z., Chief Accountant. T. N. Smallwood, Managing Director. In accordance with, the provisions of the State Advances Corporation Act, 1936, we report that we have obtained all the information and explanations we have required in respect of the accounts of the Corporation examined by us and in respect of the above Balance-sheet, which, in our opinion, is properly drawn up so as to exhibit a true and correct view of the state of the Corporation's affairs according to the best of our information and the explanation given to us and as shown by the books of the Corporation. Wellington, N.Z., 23rd May, 1950. R. C. Burgess, F.P.A.N.Z.\ a G, D. Stewart, F.P.A.N.Z./ Audltors -

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PART lI—HOUSING ACCOUNT The Corporation's responsibilities under the Housing Act, 1919, and 4 its amendments involve the administration of the State housing units being made available for letting purposes and the provisions of loan finance for housing projects. The following report summarizes the activities during the year : Rural Housing Under the provisions of the Rural Housing Act, 1939, loans are available to County Councils at 3 per cent, for relending to farmers at 3| per cent, per annum. The amount which a County Council may advance under this Act for the erection of a house has recently been increased by the Government from £1,500 to £2,000, and the suspensory loan benefits are available to applicants who comply with the standard conditions applicable to that scheme. The response to the benefits offered by the legislation has so far been poor, notwithstanding that the terms offered are attractive, and the board finds it very difficult to understand why County Councils have in the main shown so little interest in this method of providing accommodation in the rural areas. Of the 125 County Councils in New Zealand, only 44 have applied for loans, and of authorized loans totalling £795,550 only £260,256 (in respect of 360 houses) has actually been uplifted. Few of the Councils have shown any real interest since the cessation of the building subsidy which was available from June, 1940, to March, 1941. Such Councils as do operate the Act have demonstrated that it can be implemented with very considerable benefit to the farming community. As an illustration, the Raglan County Council has been instrumental in financing the erection of 50 new houses on farms within its area, and is still continuing to show an active interest. The legislation is on the statute-book, the funds are available, and it only remains for the farmers and their County Councils to take advantage of the facilities offered, and in this way make a worth-while contribution towards solving the problem of rural housing. Loans to local authorities outstanding as at 31st March, 1950, totalled £127,638, a reduction of approximately £3,500 since the 31st March, 1949. Urban Housing (a) New State Rental Units.—During the year 3,378 additional housing units were handed over to the Corporation for allocation, and the total now under administration is 32,238. There are, however, still some 45,370 unsatisfied applications on hand. As indicated in previous reports, not all of these can be considered as being from persons genuinely in need of housing accommodation. Many are from people who are reasonably housed but who would prefer new and up-to-date houses with the State as landlord, particularly at the rentals that have been charged in the past. The adjustments made in the rentals to be charged after Ist April, 1950 (refered to in more detail later), together with the introduction of a more liberal lending policy, will no doubt induce many of the applicants to erect their own dwellings. The projected sale of sections in the housing blocks should also be an encouraging factor in this respect. After a full review of the housing position, and in pursuance of its policy of assisting in as full a measure as possible those on the lower income brackets, the Government decided that those applicants whose income exceeds £520 per annum will not in general be eligible for tenancies of State rental houses. (b) Cost of Houses. —It was to be expected that in a period of rising costs and prices the cost of erection of houses would show a rising tendency, but it has perhaps not been generally realized the extent to which costs have actually risen since the housing scheme was first instituted. The following table shows the cost of erection of a typical four-roomed house containing 839 square feet of floor space on a flat section year by 2—B 13

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year from 1938 to 1950. Cost of sections is not included in these figures, and it can be taken that, except for the year 1946, the figures are in respect of an actual house comparable in all respects and erected in the same locality each year. £ | £ 1938 .. .. .. 983 | 1945 .. .. .. 1,452 1939.. ... .. 993 1946*.. .. 1,585 1940 .. .. .. 1,051 1947 .. .. .. 1,567 1941 .. .. .. 1,182 1948 .. .. .. 1,660 1942 .. .. ..1,172 1949 .. .. .. 1,798 1943 .. .. .. 1,350 1950 .. .. .. 1,829 1944 .. .. .. 1,419 * It was not possible to get an exactly comparable house for 1946, and the figure quoted above relates to a house with a slightly higher floor area but otherwise comparable with houses erected in other years. (c) Rentals of New State Houses.—On several occasions in previous years the Board has drawn attention in its report to increasing losses being incurred in the letting of houses at the then current rental charges. The scale of rentals was fixed when the scheme was first instituted and had not been varied, despite the very substantial increases in building costs in the intervening years. The table shown in the preceding paragraph supplies the background for the Board's comments regarding the increasing loss ratio in respect of new State rental houses. After considering the position of the Housing Account in the light of reports supplied by the Board, the present Government decided that rents of all houses let for the first time or relet after Ist April, 1950, would be increased in proportion to the accommodation provided. The quantum of increase ranged from ss. per week for the smaller units to 15s. per week for the multi-bedroom house. The increases are by no means heavy having regard to costs involved, and the new rentals are well within rentals allowable under the Tenancy Act. It should be emphasized, however, that these increases apply only to houses let or relet after Ist April, 1950, so that tenancies created on or before 31st March, 1950, will continue to enure at former rentals. It should be said also that the increases do not apply in the case of pensioner flats. The effect these increases will have on the Housing Account is traversed later herein. (d) Old Rental Houses. —This reference covers those houses erected prior to 1935 and those acquired since for letting purposes. The number under administration at 31st March, 1950, was 1,961. (e) Transit Housing.—This continues to serve a useful purpose as an ancillary to the main housing scheme, and the need for this type of temporary accommodation is still very real. Allocation Committees have continued to allot houses to the occupants as opportunity offers, and every endeavour is made to ensure that residence in the transit accommodation is not unnecessarily prolonged. The Committees' activities in this regard are, however, governed by the rate of delivery of new houses. (/) Allocation of Houses to Ex-servicemen.—There has been no change in the basis of allocation to ex-servicemen, who continue to obtain a minimum of 50 per cent, of all available units. (g) Sale of State Houses.—The Government has announced its intention to give tenants of State houses the opportunity of purchasing their houses if they so desire. It is apparent that the proposal has aroused considerable interest among the tenants, and the indications are that a considerable number of sales will be effected, with a corresponding reduction in the annual loss in revenue. The necessary inspections and reports will place a further heavy burden on our urban field staff, but the work will be dovetailed in with the other field activities as much as possible.

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Loans to Local Authorities Loans to local authorities to finance district housing projects are available in terms of the Housing Act. For approved schemes advances carry an interest rate of 3 per cent, and the loans are repayable over reasonably long periods. The call on the funds for these purposes has eased in recent years, but is nevertheless fairly consistent. Housing for Timber-workers The special provisions for the erection of housing accommodation for timber workers introduced by Part 111 of the Finance Act (No. 2), 1946, expired on the Ist September, 1949. For the current year, therefore, applications were received over a period of only five months, and the erection of a further 87 was authorized during the time. This brought the total number of units authorized during the time the scheme was m operation to 738, covering applications from 120 sawmillers. The scheme was successful in achieving its object of providing more suitable accommodation for the men engaged in the industry, this in turn helping to increase the labour force to provide much-needed building-material. As indicated in past reports, the timber industry itself finances the scheme by a levy of 6d. per 100 ft. of sawn timber and by the payment by the sawmillers to whom the houses are supplied of a rental of 15s. or 17s. 6d. per week, depending upon the size of the house. Revenue Account and Balance-sheet The statement of revenue and expenditure is submitted in the usual tabulated form showing the results of the year's operations in the various sections of the Housing Account. A profit is again shown in respect of the sub-accounts where loans have been provided for local bodies and others, and a loss in the three rental subdivisions. It will be noted this year that a separate subdivision has been included to cover temporary housing, as the houses erected under this scheme are of an inferior standard of construction with an estimated life below that adopted for the main housing scheme. There has been a substantial increase of £16,815 in the loss under " Rented Properties (Old)," bringing the loss for the year to £21,930 under this heading, and an increase of £85,453 under " Rented Properties (New)," bringing the loss for the year to £195,545. This over-all result is not affected in any way by any adjustment or alteration in the basis of rents or charges during the year, the loss being due to rentals being insufficient to cover outgoings. As has been stated earlier in this report, some 3,378 new housing units were handed over to the Board for letting during the year, but it will be appreciated that the year's accounts do not reflect a full year's charges in respect of the bulk of these houses. In other words, the loss recorded for the year —£195,545 —is something less than the full loss to be expected when a full year's charges are provided for. It should be recorded here that the revenue Accounts and Balance-sheet of the Housing Account attached to this report are prepared on the basis that the loan capital of £50,850,952 in respect of completed houses bears interest at 1 per cent, on the first £5,000,000 and \\ per cent, on the balance, this being the rate of interest finally decided upon for moneys raised from the Reserve Bank in the earlier years of the housing scheme for the specific purposes of this account. However, since the Ist of April, 1942, all moneys raised by the Crown for national development purposes have been focused through the National Development Loans Account in the Public Accounts, and consequently loan-moneys have lost their identity in that account; and it would not be right to say that from the Ist of April, 1942, any moneys raised from any particular source, including the Reserve Bank, were for the specific purposes of the Housing Account or any other Governmental account. In actual fact, the Public Accounts show that no moneys were raised for housing or any other Public Work from the Reserve Bank or any other source at the Treasury Bill rate of interest in the years ended 31st of March, 1944, 1945, 1946, 1947, and 1949 , and the moneys provided for housing in those years were raised by the Treasury at normal market interest rates. The Housing Account has, however, been charged interest on all capital moneys at the low rates applicable for the initial borrowings from the Reserve Bank. It therefore follows that there has been and still is an additional annual deficiency

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in interest on moneys raised and allocated for housing purposes, but this further deficiency is not recorded in the Housing Account under the administration of the Corporation. Any deficiency of this nature is, of course, a charge on taxation paid by the community as a whole, including the home-owner, who in this way must pay his share of interest losses on State housing. It is appropriate at this stage to say that the estimated annual recurring loss on all houses handed over prior to 31st March, 1950, will be approximately £240,000. In making this estimate no account has been taken of houses which will be taken over after Ist April, 1950, or of the new rental charges effective in respect of all houses let or relet after Ist April, 1950. The new rents will, on the average, be no more than sufficient to meet all outgoings on new houses taken over from now on, and there will therefore be no margin m the rents of those new houses to assist in reducing the loss on units let heretofore. It follows, then, that the annual loss in the Housing Account in respect of new houses can only be reduced by increased revenue accruing from relettings after 31st March, 1950, as distinct from new lettings. On an average basis it is anticipated that increased revenue from relettings will be approximately £2B per annum per house., but the uncertain factor is the number of relettings which can be anticipated in any given period. It is clear, however, that the annual recurring loss of £240,000 mentioned above will not be overtaken until at least 8,600 of the houses which were let prior to 31st March, 1950, have been vacated and relet; and it is equally clear that it will take many years (probably more than a decade) before annual revenue and expenditure will be equated. It is important to remember, too, that in the intervening years accumulated losses on new State houses will be mounting and will, perhaps by a considerable margin, exceed £1,000,000 by the time annual income and outgoings are equated. The total net loss for the year on all activities of the Housing Account was £197,919, and the total accumulated loss has now reached the substantial figure of £419,861.' The Balance-sheet shows an increase in loan liability of £7,379,382, and this is reflected in the assets by an increased value of properties under administration. The balance in the various reserves are shown separately, and although in total they have reached figures, they are not more than is reasonable. A reduction to unit cover shows that in respect of each new State rental unit we have these approximate provisions : An insurance coyer of £25, provision of £65 for maintenance, and £l7 to cover losses arising through bad debts or vacancies. The Depreciation Reserve is designed to write off the construction cost of each unit over a period of sixty years. In terms of section 35 of the Housing Act, 1919 the following statement is submitted : £ (1) Payments received during the year ended 31st March, 1950 .. 2,553,539 (2) Amount of arrears in respect of rentals (old and new houses) and instalments under agreements for sale and purchase as at 31st March, 1950 .. .. .. .. .. 14,057 Further statistical information in respect of the new State housing scheme is summarized below—(a) Number of new housing units taken over to 31st March, 1950 .. 32,238* (b) Book value of new housing units as at 31st March, 1950 .. £50,529'054 (c) Total amount of rent receivable on all new housing units from 31st March, 1937, to 31st March, 1950 .. .. .. £13,410,348 (<d) Amount of rent in arrear at 31st March, 1950, in respect of new housing units .. .. .. .. .. .. £10,262 (e) Total amount of rent in respect of new housing units written off from 1937 to 1950 .. .. .. .. .. £6,484 * Plus shops, 71 ; communal garages, 135 ; community halls, 8. T. N. Smallwood, Chairman of Directors. B. C. Ash win D. Barnes R. G. Macmorran I

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HOUSING ACCOUNT Tabulated Revenue and Expenditure Account for the Year Ended 31st March, 1950

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Item. Properties Sold Under Agreement for Sale and Purchase. Advances Under Part V, Housing Act, 1919 (Local Authorities Urban Housing). Advances Under Part III, Housing Act, 1919 (Loans to Employers). Advances to Local Authorities Under Rural Housing Act, 1939. Temporary Housing Scheme. Rented Properties (Old) Erected Prior to 31st March, . 1937. Rented Properties (New) Erected Under New Housing Scheme. Combined Revenue and Expenditure Account. Dr. Cr. Dr. Gr. Dr. Cr. Dr. Cr. 1 Dr. f. Gr - 1 Dr. Cr. 1 Dr. Cr. Dr. Cr. Revenue Interest Rent Expenditure (including allocations to Reserve marked *) Interest Management expenses Depreciation Insurance (including earth - quake insurance) Rates .. . . Maintenance Losses and vacant tenancies Excess of revenue over expenditure, transferred to Profit and Loss Account Excess of expenditure over revenue, transferred to Profit and Loss Account Totals £ 1,274 820 32 1,670 £ 3,796 £ 14,341 255 15,743 £ 30,339 £ 617 40 3 712 £ 1,372 1 £ 1,823 210 1,898 £ 3,931 £ 248 95 936 61 91 219 30 £ l,2i3 467 £ 19,152 8,294 36,771* 3,318* 20,915 37,834 138 £ 104,492 21,930 £ ' 668,264 155,686 456,014* 86,539* 373,373* 540,870* 53,466* £ 2,138,667 195,545 £ 705,719 165,400 493,721 89,953 394,379 578,923 53,634 £ 39,438 2,244,372 197,919 3,796 3,796 30,339130,339 1,372 1,372 3,931 3,931 1,680 1,680 126,422 126,422 I 2,334,212 2,334,212 2,481,729 2,481.729

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HOUSING ACCOUNT— continued Profit and Loss Account for the Year Ended 31st March, 1950 £ Cr. £ Balance, Ist April, 1949 .. .. .. .. 220,595 , Balance, 31st March, 1950 .. 419 861 Administration of Termites Act, 1940 .. .. .. 579 | Borer-treatment investigation .. . . . . . . 171 Pre-treatment of timber .. . . . . , 597 Loss for year (see combined Revenue and Expenditure Account) 197, 919 £419,861 £419,861 Balance-sheet as at 31st March, 1950 Liabilities £ Assets £ £ Loan liability.. .. .. .. .. .. 50,850,952 Principal owing under agreements for sale and Sundry creditors— £ purchase .. . . . . . . 82 060 Tenancy deposits .. .. .. ..32,038 Advances underState Advances Corporation of New Zealand .. 242, 407 Part 111, Housing Act, 1919 (loans to employers) 58,421 Departmental .. .. .. .. 1,293 Part V, Housing Act, 1919 (local authorities: Miscellaneous .. .. .. .. 15,086 Urban housing) .. .. .. .. 988,726 ——— 290,824 | Rural Housing Act, 1939 .. .. .. 127'638 ' 1,256,845

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Reserves— Instalments of principal receivable .. .. 8,255 Insurance .. .. .. .. 795,215 Interest receivable .. .. .. .. 4,994 Maintenance .. .. .. .. 2,088,964 Interest accrued but not due .. .. .. 6,805 Vacant tenancies and bad debts .. .. 544,164 Rates 25,973 1,276,899 3,454,316 Less amount in hand unallocated .. .. 3,730 1,273,169 Rented properties (old) .. .. .. 1,967,700 Less Depreciation Reserve .. .. ... 218,493 1,749,207 Rented properties (new) .. .. .. 53,192,457 Less Depreciation Reserve .. .. .. 2,663, 403 50,529,054 Rented properties (temporary housing scheme) .. 68,582 Less Depreciation Reserve .. .. .. 936 67,646 Rent receivable .. .. .. .. .. 29,290 Sundry debtors— Timber Workers Housing Pool Account (Part 111, Finance Act No. 2, 1946) .. .. 525,766 Miscellaneous . . .. .. .. 1,582 527,348 Writings-off Suspense .. .. .. .. 517 Profit and Loss Account .. .. .. .. 419,861 £54,596,092 £54,596,092

Note.— Dwellings under construction and vacant land are under the control of the Public Works Department and expenditure in connection therewith is not included in these accounts.

W. Gr. Dent, 8.C0m., F.R.A.N.Z., Chief Accountant. T. N. Smallwood, Managing Director. I hereby certify that the Balance-sheet and accompanying accounts have been duly examined and compared with the relative books and documents submitted for audit, and correctly set out the position as disclosed thereby, subject to the above departmental note.— J. P. Rutherford, Controller and Auditor-General. 7th July, 1950. Approximate Cost of Paper.—Preparation, not given; printing (969 copies), £B2.

By Authority: R. E. Owen, Government Printer, Wellington.— 1950. i Price 9<2.]

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