STATE GUARANTEED LOANS.

King Country Chronicle, Volume IV, Issue 204, 1 November 1909, Page 5

STATE GUARANTEED LOANS.

An Important Bill. In moving tbe second reading of the New Zealand State Gauraoteed Advances Bill in flie Boose on Friday afternoon, tk Prime Minister said for sotn« time past there had been a desire on the past of a number of people here to obtain money at a low rate of interest, while the opportunities of so

(loins were not so great as they ought tube. (Ciiet of "lltar, litar.") The &ill would give power to the Advances to Settlers Department to advance two and a half million a year, with a limit per advan.ee of JS3OUO. That would immediately do away with the necessity for keeping the limit at £3OO, &<t at present, although he thought it was a desirable policy that those dositing small sams should have preference. Hear Hear. The prop Ma I was to enable the fcward to borrow one and a half millions a year. At present the repayments amounted to a boot J£?.ol>. a year, and in the next year or eighteen months that amount would be very considerably increased, so that by that time the board would have a very large amount available annually for investment on mortgage* The whole of that million and a half would come from England, so that there would be no absorption of local fund.*. In addition, the Government Insurance .Department and the Public Trust Office would be able to lend soaw larger than the £TOOt) limit proposed by its measure. ITtider the Bill there-will not be much opportunity for anything in thw< shape of an exorbitant rate of interest being charged by people oittside the Department. The Bill proposed to make provision

for advancing loans to local bodies. For this year the amount was fixed at JSCW.fiHM). which amount, it had been ascertained, woold be required. One of the greatest troubles that local bodies had had to face in connection with borrowing under the existing system was the limitation of the amount that they could borrow. Under this bill there was no limitation. On the other hand, however, the whole of the money would have? to be repaid* instead oU the Government shouldering a portion of the burden. The intention was that the local bodies should state what they required, and under the machinery provided by the Rill the money would be obtained for them by the board, the Minister of Finance acting as the agent for the board. The money should be obtained at 3 1-2 [er cent. He proposed to ask the House to consider the question whether money required for thr acquisition of lands for settlement should not be included in the Department. He had intended originally to put it

in. but he left it cot, because he ' wanted to bear it discussed by the House. 11m opinion was that the change would i>« a gpnd one. Hn did not intend infutore purchasing transact tors to give debentures, the interest on which could be paid ©at of the Dominion. In purchasing land estates nearly every seller 'tatirrd to have the principal and interest made- payable in London. If that system was continued, it would injuriously affect our loan transactions in England, and for that reason it ought to be stopped. He had already intimated here and in London that he was opposed to such a practice. He had informed the people concerned in the financial transaction* of this country that be would put a stop to it. The reason why it was important that they should concentrate their borrowing for local and general purposes was that they would thereby fulfil all their requirements at one time in the Old Country. Nothing wa* more likely to damage our position than going on the market more than crtco a year. The system of issuing debentures for payment of land purchased by the Crown had been stopped; tbe Government did not intend to renew it. In bis opinion it would be incomparably to better pay cash, and that tbat cash should be obtained from England.