STATE ADVANCES INTEREST

Nelson Evening Mail, Volume LXIII, 19 July 1929, Page 5

STATE ADVANCES INTEREST

TIME NOT OPPORTUNE FOR REDUCTION IN PRESENT RATE (By Telegraph) (From "The Mail's" Parliamentary Reporter) WELLINGTON, 18th July. Several questions addressed to the Prime Minister (the Right Hon. Sir Joseph Ward) in regard to the activities of the State Advances Department were answered in the House of Representatives yesterday afternoon. Sir Joseph intimated that he did not consider the time was opportune for a reduction in the present rate of interest. Mr W. J. Poison (Stratford) asked the Prime Minister whether, having regard to the fact that the interest charge, able by the Advances to Settlers Department, while nominally 5§ per cent., was in the great majority of cases 6 percent., as loans were chiefly made for the redemption of existing mortgages, and rural advances loans were all 6 per cent, the Government intended taking any steps towards a reduction of the rate of interest; and would some intimation of its intention be given? Sir Joseph Ward replied that the rate of interest chargeable on loans was determined by the State Advances Beard, with the approval of the Minister of Finance, and was governed by the rate) payable on the loans raised from time to time, plus the loan flotation expenses an/d (the cost of redemption of jloan charges. As far as the present rate was concerned, the time was not yet opportune for any alteration being made. Mr A. Harris (Waitemata) asked the Minister of Finance when it was the intention of the State Advances Office to reduce the rate of interest on mortgage to 4J per cent? The Prime Minister I'replied: "The rate of interest chargeable on loans is determined by the State Advances Board, with the approval of the Minister of Finance, and is governed by the rate payable on the Joans raised from time to time, plus the loan flotation expenses and the cost of redemption of loan charges. The State Advances Board is prepared to give consideration to the question of reducing the rate of interest when the time is opportune." Replying to another question on the same subject, Sir Joseph Ward said there were no State Advances applications for loans awaiting disposal. In every case where the application was in order (he Valuer-Genera] was requested to make a valuation of the proffered security, and on receipt of his report the matter was placed before the State Advances Board for action without delay. Mr E. J. Howard (Christcliurch South) asked whether it had been decided'not to loan money on houses already erected or to take over mortgages already in existence. Sir Joseph Ward said that loans were obtainable from the State Advances Department on dwelling houses already erected and on which money might have been borrowed, provided the buildings had been erected, say, within the lastfive years. It was- not the practice of the Department to grant loans to purchase or redeem mortgages on old lwuses.