8.—6

X

GOVERNMENT ADVANCES TO SETTLEES OFFICE. Owing to the unfavourable conditions prevailing for the raising of money, the operations of the Department have been somewhat restricted during the past year. Since February last the office has not entertained applications for larger sums than £500. The balances at credit on the 31st March last in the hands of the Public Trustee were : For the Sinking Fund Account, £158,500; for the Assurance Fund Account, £91,400. I have had a table prepared showing the estimated saving of interest to our worthy settlers by being able to obtain loans from the Advances to Settlers Office, instead of having to apply to lending institutions and individuals, to whom they would have had to pay a very much higher rate of interest on their mortgages. The amount saved is estimated at very nearly half a million of money, which saving has undoubtedly been employed in the improvement of properties or the acquiring of stock, thus becoming of great good to the settlers themselves, and consequently of benefit to the whole community.

Table showing the Saving of Mortgage Interest to Settlers who have obtained Loans from the Government Advances to Settlers Office.

The approximate saving to the settlers of the colony from the date of the coming into operation of the Advances to Settlers Act to the 31st of March, 1904, amounts, as above, to £493,542. Now, assuming that £493,500 represents the saving to mortgagors who have borrowed from the Advances to Settlers Office during the last nine years, I think it would not be unfair to assume that all mortgagors in the colony who have renewed their mortgages with other lending institutions or private lenders have benefited to a similar degree. The ruling rates of interest nine years ago ran from 6 to 8 per cent., while until very lately they ran from 4 J to 6 per cent. It is found that there are in the colony mortgages to the extent of about £40,000,000. Assuming that the Government Advances to Settlers Office has passed through its accounts mortgages representing £4,000,000, this would have been about a tenth of the total sum represented by mortgages current during the period in which the Advances to Settlers Office has been in existence, and the saving in interest to all mortgagors during that period would therefore appear to be a sum approaching £5,000,000. In arriving at this estimate, however, it must be borne in mind that years ago large loans could, doubtless, be negotiated at 5 per cent. I should therefore say if the sum mentioned were reduced on this account to £3,500,000 the estimate would be fair and reasonable. It is worthy of note that this saving exceeds the whole amount borrowed under the advances-to-settlers scheme.

Year. Number of Applications. Amount authorised. Calculated at Calculated at T 7 * P er f' 1 *'. < l Rate ?' 5 per cent. (Advances *»*"•' w nch w ° uld to Settlers Kate v d °" b " eSb a i' aVe rl,1 ! d , T , ., had the Advances to of Interest). „ ,,. ~~ , ' Settlers Office not been in existence). Estimated Saving to Settlers. 1895-7 1898 1899 1900 1901 1902 1903 1904 3,920 5,139 6,222 7,448 8,701 9,862 11,293 12,536 £ 1,112,775 1,405,965 1,699,145 2,179,440 2,679,520 3,073,685 3,581,660 4,009,520 £ s. 55,638 15 70,298 5 84,957 5 108,972 0 133,976 0 153,684 5 179,083 0 200,476 0 d. 0 0 0 0 0 0 0 0 £ 8. 83,458 2 105,447 7 127,435 17 163,458 0 200,964 0 230,526 7 268,624 10 300,714 0 d. . 6 6 6 0 0 6 0 0 £ s. 27,819 7 35,149 2 42,478 12 54,486 0 66,988 0 76,842 2 89,541 10 100,238 0 d. 6 6 6 0 0 6 0 0 493,542 15 0