STATE ADVANCES.

Manawatu Herald, Volume XLVIII, Issue 3663, 9 July 1927, Page 2

STATE ADVANCES.

MINISTER EXPLAINS POSITION

A statement dealing with State Advances was made by the Minister of Finance, Honorable W. Downie Stewart, in the House on Thursday. The Minister said that he quite realized that a great deal of disappointment had been caused to peo pie who had not got loans readily from the State Advances Department.

On the question of arrears and applications the Minister said he thought it would he quite fair to say that the institution was so popular that it was impossible to cope with demands unless the Govern men! were to borrow £5,000,000 or £0,000,000 a year, and it was not possible to do that. The applications are very much in arrears and in the present circumstances until we try out the Rural Advances, I cannot see any prospect of catching up-on the arrears. Mr. Stewart said he had arranged with the Department to submit any urgent cases to the Public Trust or other Government Departments, so that borrowers might take advantage of what these Departments had to offer, even if they had to pay a slightly higher rate of interest. ,In tile last four years, continued Mr. Stewart, there had been paid over for the erection of 9149 houses just on £8,000,000, and £2,750,000 bad been advanced for the purchase of 3974 houses. For repayment of existing mortgages on 2715 homes £1,750,000 had been paid over. The total number of cases dealt with in that way was thus 15,838 at a cost 0f£12,500,000.

Up to this month applications totalling £790,000 had been received by the Rural Advances branch, and the Board had already had submitted to it applications amounting to £435,000, the amount granted since Ist April being £318,385. Mjr. Stewart said that he had a •table which showed the effect of the depression on the question of prompt payment of loans, whether by farmers or workers. Up till last year workers who were borrowing up to 95 per cent, of the cost of their house were making a better showing than farmers iji prompt payment. Ninety per cent, of the workers were earning a rebate for prompt payment, and only 85 per cent, of farmers.

The disparity was greater this year, and illustrated the fact that when the depression came, the first men to feel it were the farmers.