STATE ADVANCES OFFICE

Hokitika Guardian, 12 July 1929, Page 7

STATE ADVANCES OFFICE

RATES OF INTEREST.

ALTERATION IN DUE TIME. / , , WELLINGTON, July 10. The statement that when occasion arose the question of an alteration in ihe rate of interest on loans would i.e duly considered by the State Advances Board in accordance with the provisions of the State Advances Act, •..as made in the House to-day by the i'l ime Minister, Sir Joseph Ward. The matter was raised by Mr Barnard, Labour member for Napier, who asked whether the Prime Minister was aware that the State Advances Office was charging interest at a minimum rate of 6 per cent, and whether it was intended to continue that apparent increase in interest charges while there was an apparent falling tendency .

Sir Joseph Ward replied that the present rate oi .interest payable on State Advances loans was 61 per cent on loans to workers, 61 per cent, on bans (other than redemption of mortgages) to settlers. All those rates were subject to a rebate of 1 per cent, for prompt payment. The rate> were lower than those charged finloans arranged outside the State Advances Department. Especially was that so in the case of all loans borrowed on the security of land held under leasehold tenures. It was gen erally known that outside financial in stitutions did anot seek such securities, and where they did a higher rate than was accepted on the security ol freenold -.lands was demanded. The rate of interest chargeable on loans was determined by the State Advances Board with the approval of the Minister of Finance, and was governed by the rate payable on loans raised from time to time, plus •,loan flotation expenses and cost of redemption of loan charges.