WELLINGTON NEWS

Hokitika Guardian, 14 October 1927, Page 4

WELLINGTON NEWS

MORTGAGES AND INVESTMENTS,

(Special to “ Guardian”.)

v opeciai u> vjuaiuiuii .) WELLINGTON, Oct. 12. While there are considerable complaints as to the long delay in obtain- j ing loans from the Advances Department, in the private loan market suffi-j eient money has been available tor the . purpose, at all events that is the opinion of Rvne. Gould. Guinness, Ltd., who refer to the matter in their annual review. They remark that the State Advances Office no doubt has to some extent supplied a want, hut except at the early part of the year the demand] for mortgage money upon good security has not been great. I'or most part mortgagors have already obtained on mortgages as much or more than they are entitled to upon their land. \ cry few mortgages have been repaid, but tin* main reason why the mortgage business has been dull for some time is that very little land has been changing hands. 4\liore it has changed hands it has been very often at the instance of the mortgagee in which case the mortgagee has left the greater portion of his money still upon mortgage on the property. And this state of things is likely to continue for some time longer. Even il the price of land comes down still further, investors in land will not become plentiful until those now on the land have made sufficient to justify them in launching out further. It is pointed out that during the past few years the amount borrowed by local bodies must have run into many millions. Previously much of this money came from outside, but now it is apparently furnished from the sources which previously supplied mortgage requirements. Had it not been for this borrowing it is possible that the interest on mortgage money might have been lfis per cent lower. This view is probably correct. It is the more attractive character of loc*d body loans that has curtailed the supply of, mortgage money. Local body loans, except here and there, do not carry more than 5} pci cent interest, while on good safe mortgages 7 per cent and even more is easily obtained, but witli a mortgage there is the “ grace ” period of payment, and often notice to bo sent to the mortgagor to remind him that the interest is payable. With the bonds ol local bodies tnero are no such delays or formalities. The interest is posted to the investor on due date and there is no trouble whatever. Furthermore since the slump oi 1020-21. a good deal of mortgage money has “ goho west and that has made investors feel rather shy of mortgage securities. A good many investors do not like the bother associated with local bod\ debentures, and such investors havr found 'Stock Exchange securities ti their liking. This accounts for the activity in hank shares which yield it most eases as high a return as do the bonds of local bodies, without any lusnr formalities in respect to the payment of dividends. Money or loanablt credit is scarcer now than it was a year ago, and it is unsatisfactory t note that the people are not saving, ai least not the same extent as formerly The Government’s issue til bonds oi behalf of the Rural Credits branch ol the Advances’ Office has yet to lit placed on the market, hut any sin I issue L not likely to meet with nine! success just now, because the funds art not available. The review referring to the com plaints of high taxation, high cost o' living and high costs of production contends that they are all due to tin burden of our dead-weight debt, to r heavy pension list and to an overstaffed and expensive public service The Government itself is tlie hurtles' pressed of all. It knows well that tin shoe of heavy taxation is pinching, bu to retrench means the discharge o hundreds of civil servants, and the in crease of unemployment, and the re view adds: “Our real rulers, the C'ivi Service Departments, which look upm the public as sheep meant to he short don’t want economy and do not prnc ti<e it, and so the Government goe:

merrily on, borrowing, spending and taxing.” It is refreshing to find a joint stock coinjiany dealing with economic and political conditions in plain language, and if others would follow suit, it would lead to improvement in our business and political life.