The Daily News. FRIDAY, FEBRUARY 4. STATE-GUARANTEED ADVANCES.

Taranaki Daily News, Volume LII, Issue 306, 4 February 1910, Page 4

The Daily News. FRIDAY, FEBRUARY 4. STATE-GUARANTEED ADVANCES.

The constitution of the State Guaranteed Advances Board, announced yesterday, should shortly be followed by the .gazetting of the regulations requisite for the carrying out of the provisions of this highly important measure. T'.kj Act practically brings under one roof the various 1 borrowing and lending departments of tlie Government, which will conduct all the operations and borrow all the money required for the specific purposes mentioned on the busts of a- guarantee by the State. The purposes are: —Advances to Settlers; Advances to Workers; Advances to Local Authorities; Guaranteed .Mining Advances; Lands for Settlement; Xatire Land Settlement. For the purpose of carrying out the Act provision is made for the establishment of an Advances Office under the control of a superintendent, with a deputy to carry out his duties during absence or when and while the office is vacant. The Act also constitutes a board. The loans necessary for the operation of the Act will be raised by the Minister of Finance on behalf of the superintendent, and guaranteed t>y the Government. Fo r advances to settlers the amount may lC raised in any one year is limited to £1,500,000; if that amount is not raised in any one year the balance not raised may be raised at any subsequent period in addition to the amount authorised to be raised during that subsequent period in addition to the amount authorised to be raised during that subsequent period. For advances to workers the total amount that may be raised m any one year is limited to half a million. The amount that may be raised in any one year for advances to local bodies and mining authorities is left to the discretion of the Governor-in-Coun-cil (which means the Government), except that the amount for guaranteed mining advances must not exceed £20,000 ii year. For the current financial year, also, the amount to be raisod for advances to local bodies is limited, to half a million, and in future years it will be limited to a million.

For the acquisition of lands for settlement the amount that niay be raised in any one year is not to exceed half a million, and the same amount is fixed for the purchase.and settlement of native land. All moneys so raised will be guaranteed by the Government, and will be a charge upon the assets of the Advances Office, all lands vested in the Crown and subject to the provisions of the Land for Settlements Act, and on all native land acquired by the Crown under the Act. The rate of interest is not tP exceed 4% per cent. The Act also provides for the establishment of a reserve fund, of not less than £50,009, for the Advances to Settlers branch, io be invested and reinvested in advance to settlers. A similar fund is to !>e vested in connection with the Advances to Workers branch, to consist of the whole of the net profits. In connection with both the above funds a sinking fund is to be established, of 1 per cent, of flie total moneys raised each yea. - . This, will bp. Twirl over to the Public trustee for investment; provided that, when so directed by the Minister of Finance, the Public Trustee must pay over the fund or any part thereof to the superintendent for investment on mortgages in tho branch. Full accounts of the transactions of each branch arc to be kept separately. With regard to advances to settlers, it is provided that moneys may be lent on, amo'ig others, land hold under lease from a Maori Land Board under the Maori Lands Administrative Act. No stdvanct may be less than £25 nor more than £3OOO. Applications for loans not exceeding £SOO will have priority over applications for larger sums. An advance on the security of freehold is not to exceed three-fifths of the value of the security, or two-thirds where the land is first-class agricultural land. No advance on leasehold land will be made until the conditions of the lease have been complied with up to the date >f the granting of the advance, and the limit is fixed at three-fifths of the value of the lessee's interest in the lease.

As to tli e mortgages, the term of the loan is to be thirty-six and a-half years, and the loan, with interest at 5 per ceni, is to be repaid by seventy-three half-yearly instalments constituting principal and interest. A mortgagor .who is a lessee is not to be allowed to surrender his lease or exercise any right of purchase without the consent in writing of the superintendent. Provision is also made for a rebate of onetenth on due or advance payment of interest, and for the payment of principal in advance of the due date. When not less than one-tenth of the principal has been paid, the loan may be readjusted, and the balance of principal unpaid will be treated as a fresh loan for a fresh term. The mortgagor may also apply for and be granted further advances during the currency of a loa:i, up to the limits fixed by the Act. When Crown lands on lease arc mortgaged to the board, the Land Board is not to be allowed to forfeit or cancel the mortgagor's lease for breach of conditions or accept any surrender without giving at least three months' notice to the superintendent. Even when the lease is forfeited, cancelled or surrendered, the mortgage will be a first charge on the improvements. As to advances to workers, the Act lays it down that a worker means u a person emploved in manual or clerical work, and who, at the time of his application, is not in receipt of an income of more than two hundred pounds per annum, and not the owner of any land other than the section on which he propones to lmiM." The amount that may be granted o any one borrower is limited to £-130. and no advance is to be made exceeding the value of the dwellinghouse 10 be erected, or exceeding three-fourths of the value of the security in the case of freehold land,, or three-fourths the value of the lessee's interest in the lease in the case of leasehold laud. The j amount of the loan, if the applicant so desires, may be advanced by progress payments.

Another .portion of the Act relates to advances to local authorities, -who will, have to apply for loans to the superiu-' tendent. Before granting a local body's

application for a loan, the Advances Board must satisfy itself that the local hody is duly empowered by statute 'o raise the loan, that the purpose of Ukproposed loan is just and reasonable, that there is at least the security of a special rate to meet ten per cent. more than the periodical payments j:\ respect of the loan, and that "the application has been approved by the Minister of Finance. The rate of interest will be the same as that at which the money was raised, with a commission fee not exceeding one-half per cent, for expenses. For opening up land for settlement the amount that may be authorised by Parliament in any one year is limited to £IOO,OOO. Tliis is to be expended under the authority of the Minister of Lands, after the SurveyorGeneral has reported what development works are necessary. The loans so raised will be a charge on the land so acquired, arid will be taken into account in fixing, the letting value of the land. In all cases it is provided that full statements of accounts shall bo laid before Parliament, and full powers of investigation of the various aceouius are given to the Minister and to flu Audit Office. It is important to nolo that if any person employed in the business of the Advances Office takes any fee or reward from any applicant for a loan he is to be dismissed from his office, and is, in addition, liable to imprisonment for a period up to two years, with or without hard labor, "f any person who has any pecuniary interest in any land tendered as security for a loan or is a partner of the applicant, acts as valuer or sits and votes at any meeting of the board when the application is being considered, he renders himself liahle to dismissal and to a fine of from £SO to £2OO. The penalty for bribing an officer is imprisonin en t for any period not exceeding two years, with or without hard labor.