STATE GUARANTEED ADVANCES BILL.

Dominion, Volume 3, Issue 651, 30 October 1909, Page 6

STATE GUARANTEED ADVANCES BILL.

; SECOND READING DEBATE.' ;' The-'PRIME : 'JnWISTER,- : ; in ' moving the seoohd, reading.-of .the New .'Zealand State Guaranteed Advances'Bill, said that in ; regard to, ordinary mortgages, "the .Biir would 'give power-tp"the'Advances to Settlers Bopartment to advance about ~Z\ millions ,a year without limit/-t0!..£3000., '-It'"would- immediately remove the >necessity; for -.keeping a limit of ■■• «£SOO, though he.believed that those, requiring smaller advances ':. should ' have a preference. Other institutions'.would,be,-able to lend ,money.'in larger,,'sums;.;ihan,'.£3oOb. The whole of the Department's.money would come from England, so; that''there would' behoabforption of local money.' The Department would a'dvance'money to'local, public bodies.!. The total amount so. to'be! lentl.was'..limited this year to iSOO,i)OCI, and .the limit; would be' fixed by Parliament each (future, year. The amount'had been : fixed at,.£5(10,000 for this year because, as the result of > an/examination;, that., appeared "to! be; the ; full 'amount;' required., The new Bill disposed' of the .existing;system./oi.Joans to local; bodies., ; : 'Mr.':Massey: So..'mueh'^the-'.worse.. : . '■■':'■ .; ;:The>Prime Minister.;said •'under this. - Bill, "there 'would;.':V,be.'.np'::'limit: 'on the amounts! .!whioh':'could- be .-iraised- ; ,by. .'public -bodies-'so Jong,; as', thbre ''was 'eatisfabtory',.security.".-! The former :vbaji',would ,-be;.'remQved,-, which put, smaller;!/bodies'... at' a as!., com-. pared *wjthllarEer,.ones. ..But the/old systemof. allowing'': a/lesser..;/a'ttbunt'.;than the.'principal,to;be.repaid!,a'ty,the.,«Bd/of the/term,.'co'uld:not :boyapplicd':tpMa''(imiprehensi,ve;. measure' like' this.;,';They,JcqiUd ,; the" old !sys-". ; tern!as''wellJaS/tbp!''new;! J one.;;.:■..','.■';'/,;■ ;':'-■'--,■•■-

Jtr Massoy asked why they could not have both systems, one for tho smaller and tho other'for the larger amounts A Comprehensive Bill.

j The?Prime./MinißterA'said v that v that could Tijjt,ibe".d6rie;,\?irrider''tne-,Xbans'to'.Local Bodmoney''could be ;go'tvfrom,EnglandlvV.if.the,;whole, of the' , lip---, bodies ■> of ,i'New;,;-.Zealand.. required '"' after t,thjs:year'.a fetal Cot /one-' million pounds; under '^his.machiaeTy';it'. oo'uld.bo obtained • for them, • .thevMinister.ior.'finance 'acting ias- agent;only :,tp.'.thA' l State ; Guaranteed" r AdVancesjßoard.- i .'Ee j also: proposed thatHhey'ishould ;rnclude in! the' ..Bill, advances; for the purpose;Of assisting'the graining Therei.was'an'importarit atiteration- provided';fdr:by',' : the' Bill, by ;which' ithV^Eubho>,Trustee : ',was inade'the.oustodian. iefjitheVsecurities of■: the 'Guaranteed 'Advance's .rlifpartmeht, ■ and ; iri ..turn;, the. sinking ■:fuM ; i VaS' jiiyest^'; ;•/',- '■.?>' ,■;•; : "';TMe l on;to say th'nA 'it • was.certain.the'; money; required, could be.'got at ■',•;, >;'■': v.;.; ■'■-■-",-v .'•■:.';,. ■;.-:; ; \ ':'-;Mr.; v Fraser'^Net?' ; :>-;"';V; : '^'" -,; : ' v ''.' ./.'hi. ;i(:Sir>Joseph':?There 'must,'be :charge3'in re-' ':gard'tb!.thevraising'of a loan.'; .'-•:•. ";'. .; '",:-.■'} ;:;Mr.-Eraser:; At'ptofv;;;,;; j|'v>Sir. ..Joseph:.; I;'can't:;'possibly tell you, and jyoV recognise- that KV}C : '; ■•: ■::■:■'■:■ ■■'■;■• ;■•;,. £$fr-Eraser';; I;.understood,you to-6ay-,,3i per. .jceht. , .p'ar;'i..'!i' : -,';;.V : :,;..i : -v. :: ■', -■■'■ ..''•:.„'■.:■. ■"'•.;,■ Joseph then; said that;he ; -,had; no '..doubt jbut- .that-: not long ' ago i'h.ave got .money at '3.;per,;6ehtU.:';W,;.tii.,. •■-.'Mr.. Eraser:, How inuoh-'below par ':';.. --.; k 'Sir Joseph:"■ Unle&; there Vwas'an'-advantage rjake;.it>t'ja V'\ v ' : '"'''^ f v'>' " M

-yrSir.Josoph.said/ho; .proposed .to. ask the .Jiouse to .cpnsider:whether.,thßimoney .required .for;, lands-, for : settlement {should;- not bo ■■■ihclu'ded.'under the proposed- system: 'It .was'his own', opinion', that' it would be better' to include that:. branch—better' '■ from . the '• standpoint" of' obtaining; money" required; from \time to 'time lnuEngland , for.,;the;.;acquisition ,;of- estates;'Sp&king.as Treasurer,,.hewould .point out that hej, did;.,not,-intend..in;.futare. under, 'any -con,ditjphs ;to.\ authorise.;the i-.pa'ynient;of -any prbthe j right j of/payment-of'interest.outside New Zealand. When purchasing lands it .was found inMnevcases.'out'bf .ten, :,in:fact,'in':air : cases pxcept an~bdd,:phe';.here'.and there, the ewriors wanted.'.the'right..:'of',;payment; of,;interest 'in England.-flf that;system.were 'to 'be'continued : it.;.wbuld- : haye.'a..veiy,:inj'urious.;eilect in con;hection:liritnthe'.,,Taising;bf loans.' at- : Home.' When,,at:\Hbme.:he •had-;informedv.the> people: ,whb.yw;e're,. I 'cpiicenied^in::cbihection ;: ':Trith..' L the'.financialcoperatipns \ of; this.; country.•that he -intended ;tg;stbp;the-,present;:sysfcm.:V .When ■the:';Gpyernmont;bbuKht prbperties ; '.it'ought to ;pay;.,cash,;in:':evesr-.'instance; The advantage of.;.'c6hcehtration';;in respect of: .moneys all "social; InhdeWakings-.-was'.fthat'.the-'Dominion cbnlcl got;; its'.-' financial 'requirements 'fixed j at onp;time,'::Nothihg:was more.damaging than to go;:oh ! >to:;the: : money': market more- than' once a':year,, .He ,khewßthat;.in'oney would bb very cordially,;adyanced-,if■ the "Government: were .npt.i.gping,■on. ;the.•market .from ..time 'to time.' ..Owing'to ;the,.;fact .that--debentures issued' by .New;, Zealand; we're-unloaded-on'to the market in', larger amountscthan.could..be. absorbed depreciation > of-tho/Dominion's loans took place. ■If:it;had'not.been;for',the .present limit; \\ million could have'beenboiTowedat,3 per cent. Recently,'itoj. .the purpose, of; being advanced' by .the. should be taken'to"re--.move the:bar.to'which, he had referred,- so as. -to-.enable, the;-Department, when "there .was .necessary.'business to be done to .'obtain sufii-:ciont:-'money;.'for;, the:' purpose.:,f:His:.proposal would ensure;the.regular.introduction'of money; to: help,industry—and. by 'industry he meant, ithe.'.man.on ; ;the A soil, ond:tho man engaged, on' 'iWrfc in .'tK'i. t 9Ws. l '.Jn.'o.rder that some dt.the . money cpuldAbe-raised, he.' was -anxious that the Bill;vSh6uld',bb'put';tlirdugh;at'once. '■■:' ;i ;Mr.:Ji'-Allen's Opinions. .:. ;''■ '-~'•.-;';': ~.' Mr;;JAS; 'ALLEN,'(Bruce); prefaced his' re-marks-byr'statihg; that it was not .his intention to: adopt' :a;. hbstild attitude towards the' mea- 1 to- say; that it did not make. such:, satisfactory .provision, in- regard to ; local .'.'bodies as, he/wouM have ..liked to have ' seen.' The/Prime Minister had not.explained ' why ho'jdid not include his proposal "ihrespeot of-the' moneys, for.theflaiids for''settlement in- 1 theßill."'.When. h'e ; 'was:>at; Homo it had been impressed oh Sir Joseph, as the Opposition had I in previous^years,,that it'was':.iin-'statesm'an-like. policy-.to issue /short-dated de- i ,bentures, ; .j\'hich,.,were;aiteri? : ards taken' to Lon*dbn'.and;'converted'into other securities; It would be better for. New Zealandto borrow the: money estates;in cash.. He wished Sir Joseph had. been, more explicit in ■cohnectiph'.with his;'explanation of:the term "State..-giiarantee.''' : 'lt .was;his,hbpe.vthat:tho local!,bodies- were: to, get;facilities .for borrowing,; with.' *i State attached.' , He • .whether ,; it; was: intended ito^get^ah.;individual..outside ■ "New.:; Zealand. tb take.Jup'/the.'positiori. of,.super- ; .-,';-•,.; :':/•;:";'■.; „,'r':; :■■ -■■■ ~•,'■;',■ .' ( " Sir/Joseph: yNo.; .:•."' '.■:,'■■. /;' '':- : '\r: .;•'■ ■'~'.' ' .'i.'Mr. i'Aneri'J'saitl'tt". was .'no-use.' Sir' Joseph' : qnetrog interest.'uiilbss he stated whether there wpuld• be .a .big."discbunt in connection-with- ' tho-.proppsed loans-or hot .The amount which • 2 0U Jdibe'borrowed Under.the Advances to Set-' ..tleTr'Act,'.'iviz;,:, .too high, and he :?? u 44 . "*o: to; see .> it .reduced: tb. £500, or por- , haps; a", slightly larger'sum. .It was the man ,; JE6OO; that the,' State should to 'assist, in preference to ..thpse-iTrtio- .wavts'd' larger'sums.'; Frourwhat he . could-gather;it f seemed to;be.the intantion of . the,; Government ;to'.replace: the wholo of the , loan:componies.in:'New 'Zealand, He regretted . that the Bill:did notcontoin provision for dbing'away. with .the -present system of.grants for . roads.and bridges, and -the, establishment of a system;xmder.'.which;the, bp-car- • ned putby meansofibans,to local bodies, with . ;assistence;iby::the.,State. "-•::- ':.'"•.-.-' ."■.■■■■•■.vr','V'He;;qTi^pMfwh^heT,"tne'.'partyrof:th'e Bill was.-a? very, safe part .ef ■it/';i.The local .bodies,,by-paying ;the actual rate' ; of .lntorest, secured.-by tho land, would be worse v' 'eff;-.tnan..at"present,:because .they--could ribw '<boirow;for-.32 years at 4 per cent.,: or il years J 'Sit'3J per cent, without a; sinking fund. The ; .Government,.: as', part ;of its -policy, had deinjerafely. incurred :a loss,in .regard to the'loans ,toj lpeal bodies.' 'He : to ;the prbp'osnl that the amounts advanced■sbbuld'bo'shown,in reduction of the public debt What should be

done" was to' place . the amounts in; question alongside the.total amount of the public debt. Other, Members'. Views. ■ / Mr.-FRASER. (Wakatipn) ' regrotted' that .there was no provision-for tho ■ extension of .tho concessions to those ; who wished to cut a water-raco for the purpose;of irrigating lands. He would,- perhaps, be : told that there was a grand irrigation scheme in prospect, but it wasonlyo'npaperi-andhe, would sooner see the Government help tlioso who were willing to help themselves. If the' Government could got the moneys for from,.3J per cent, to 4 per cont. par it would' be worthv of commendation. , Mr. HOGG' (Masterton) said the. key to prosperity was to make land -more, accessible •to the'.sottler and money- more, plentiful. Much money would have, been saved to the local bodies if they had been able through the' State to consolidate their loans at a reduced rate. '■'.

Mr. WILPORD (Htrtt) was of opinion that had the Bill been '.in operation ..last .'winter; there would have; : been;much less unemployment, - While it promised to be' an. excellent measure for large advances, the machinory would not be so well suited to small loans; Tho theory of combining local bodies for. the purpose of obtaining loans;-was a good one, though thero might be difficulties in practice. . \ Mr,; MACDOWALD. (Bay of. Plenty) - hoped that the first result of tho Bill,in his.district would be a comprehensive programme of roadmaking. ''■: ... :.■•'.. :,-.- •■'■/. .-..-„,. -,- Mr. .LAURENSON. (Lvttolton) thought, that provision ,should be-made in, committee to extend the amount of advances' to workmen,.especially workmen with large families.

Mr. M assay's. Opinions. ; '■'••'.' : ' \ •'• Mr. MASSEY noticed an -unusual air- of sweet reasonableness? in, the discussion. TheBill was not a parly measure, and he did not approach;it in a hostile spirit, but a"good Bill , might-be the better for. fair criticism.., 'He objected to. a.good deal :of the. proposals af-' fecting local bodies; Tho first thing that struck' one was the immense amount of borrowing that was contemplated. "A- limit"should be placed to the,-number of ; years.in which "one and, a half millions' could bo.:borrowed for advances to settlers'. They should do "everything'' they, could to'make money,as cheap .as possible to settlers. The .maximum amount of, .£3OOO, which it; was proposed should 'be-/capable „of! befog borrowed by one settler, should!he'reduced.,A settler who.had security;to borrow that amount could borrow from other institutions.- If they lowered the maximum, they, would -do away with.the suggestions that when the. amount was lowered for the time" being there .were possibilities of favouritism. : : He, had ■ seen ■ the 'documents; held by a member" who .had made a ■ suggestion of* this-kind—(the' Prime-Minister: "Why did he not.show them" to me?")—and he had not:the;slightest.d6ubt'that;the statement imade by b.im was right; -They should prevent, the. practice' of .borrowingmoney ffbm-the.De-. partment and .lending. l it.again •at':higher', in-, terest -The /provision, making .local .bodies, provide 'tho , sinking,' fund'' involved: a.-';.retrograde 'step, which would' not!.bo toi'the'-.advantage'of the'.cplony.'.'.'and ,he:.would ;;vote''.!■ against'- that; portion; of.;the' 8i11.,' .Under existing c'ircumIstances; the sinking' fund' was', practically ..'pro,'vided by the,; Government'.'; When there wasiio Government'guarantee ;behind a loan the. Gov-. ' brhment ■' should not. be , allowed , to' interfere" with■;the sinking ,fund,. which,'the'-'.local,,'body should.be' able tovinvest as-, it. liked... As the .Government, had . to' pay .'varying, rates/for 'its money;,.ho -wished!'.to,'' know /at.' what t rate,it' .would !bb" advanted to local bodies', - ' who - were to got their advances'at the .samo price as the Government... Ho would like to see. tho.; vances to' workers, increased from ;^3sp"to' -.and; advantages, given .to ■ workers, with ■ largo families:! He was 'glad.thntthe Prime.Minister iintended; to.; give ,up;-raising 'so. much '.'nionfiy! by ,'ShorWated When .money; ;'was'resquired, the Government should go to the/Stook ■■Exchange and raise it -.in the'-, ordinary, way by inscribed 'Btook.'.'!;'.'...' I ..■'-.'• :^"',.':■ ".,'.-. "' '■■'."''■

.PHme"Minister,in.Roply. '-'>'..:;' :\Tho:PElM;;Ml^Km;ikrep^ng^Bidt^:t--the existing Advances'to Settlers Act provided for, loans up.td'lf millions a year,. : and the'-oniy difference made by' the new Bill was that the 'limitation of six millions was abolished. : ll the maximum of .£3OOO was reduced to. £500, .as had- befcn.. suggested,- interest on allv'amounta above that sum would be'increased dminediately, and the result would be dearer money. The government "did not.want to' lend all the money they .were, asking authority, to borrow' 1 under the Bill. They wanted to see that there was cheap ■money- in'the country,..and. it',,the llopartmenc could :be utilised ,to' keep 'money at a' reasonable rate ibf.interest, it would do an enormous amount lof good.' The Bill gave opportunity to lend;.:to settlers'- and' workers between them" 2J millions per: annum, and that should have a very'oboneficiab.effeet. .'.'lt was/ wonderful, what,, had been done:already in regard-to this cuttingup of-large estates by private people. All tho settlers:who had:taken up those lands wanted monoy.: Nothing had had a more settling''effect', than the,advances made by -the Department during the past twelve months. .^During,the last .twelve or eighteen months local bodies all. over-tho country had been seeking formoneyat' 5 .pej cent., and some, of them < at; 6 per cent.' The' Prime Minister, pointed out that it would not ,be ..necessary for -the local bodies to'; go on paying interest for the full, term of 36 years; they; could .pay; off the'loan. whenever they found'themselves; in a' position' to do so. ■ Por some, time no .debentures '.had. been, issued in : New', Zealand with'■, right* of payment of. prihleipal; arid:interest in London, ■■ Now the system had.been' Stopped for good. He-denied:that there was any .special reason why the proposal m regard-to lands for settlement had not Jjeen .included in the Bill; but he thought: the measure should embrace the proposal.' Ho. would' bo glad-- to,; consider the -proposal,-that the'A'ot should extend, undertakings., If a loan were I 'raised fat 94,' the local bodies would not have to make', up the difference, but> frac--tional'partvmight-be'added'to the.interest,,and, be payable.'.over .'the.'terra ,of the -loan. !'. ,V ,

. The ; second; feadihg -of,, the! Bill was ■■agreed: to. on,tie , -'yoices;^anivtl!e'-BiU , .'".was.set.doTfn,fpr comrnijtal.: phinexl, 'sitting ..'day/.!,-, :'."■;' V .'.■;'.. :.: The• adjournment;,was'.'.carried'on the! Prime: Minister's motion .at.10.30 p'.ni. ■'',';. ■''.[■',