The Daily News. FRIDAY, SEPTEMBER 15, 1922. STATE ADVANCES.

Taranaki Daily News, 15 September 1922, Page 4

The Daily News. FRIDAY, SEPTEMBER 15, 1922. STATE ADVANCES.

The statement made in the House on Tuesday night by the Premier, when moving the second reading of the State Advances Amendment Bill, will in all probability be the source of considerable satisfaction to the numerous class of settlers who are in need of financial assistance to develop their holdings. Geenral endorsement may be expected of Mr. Massey’s assertion that one of the greatest drawbacks of the country at present is the paucity of money for mortgage purposes. In reality, however, there is no lack of funds for investment, but the rate of interest demanded by the lending institutions is not only prohibitive but absolutely unjustified, in face of the low rate at which money stands in England. The proposal to strengthen the finances of the State Advances Department merits commendation, and there is some justification for Mr. G. Witty’s appeal to the Premier to borrow five millions instead of two. While admitting that a lavish borrowing policy should be resented and prevented, it has to be remembered that money raised for advances to settlers stands in a category by itself, and does not, as Mr. Hanan contended, increase the burdens of the country, for the simple reason that it is lent out to settlers, who not only pay the interest and charges, but use the capital for increasing production, thereby adding to the development and prosperity of the country. Take, for instance, those engaged in the dairying industry who are desirous of eliminating unprofitable cows and replacing them frith high butter-fat producers, but are lacking the necessary capital for the purpose. If all dairy farmers were encouraged by advances of cash to bring up their herds to the desired butter-fat level, the result from a financial point of view would be considerable; the Government would benefit, the farmers would benefit, the land would benefit, traders would benefit, and so would labor. All this—and more —can be achieved without costing the country a penny piece, and for that reason the Government would be quite justified in borrowing five millions instead of two. Borrowing by the Government for reproductive purposes, in the case of a young country like New Zealand, is essential to progress, but there should be a definite sinking fund, created by repayments on the part *of the settlers and invested in liquid securities so that the loans will automatically pay themselves off without any cost to the country. The only portion of the Premier’s statement to which exception may be taken is the intimation that when the money is available it is to be the object of a scramble first come first served. Obviously if such a method of allocation is to prevail, many deserving necessitous eases may be left out in the cold. The principle that should prevail would appear to be that of making advances to those cases where the accommodation would be of the greatest assistance towards increasing production, besides that, a portion of the loan proposed to be raised should be utilised for initiating agricultural banks, the object of wnich is to gradually make the farming community independent of moneylending institutions, and to build up. on a co-operative basis, a financial concern to which they can have recourse without fear of being sold up at. a moment’s notice. Another matter open to adverse criticism is the proposal of the Government to make the Repatriation Department permanent. Such a step is diametrical]y opposed to the economy crusade, which certainly should aim at concentration instead of disintegration and multiplication of permanent departments, and staffs. The Advances Office should be’ able to deal with all loans to individual settlers, whether return-

ed soldiers or not, and, with the assistance of the land boards, could easily manage all the business connected with repatriation and settlement. If any local assistance is required, there are men only too willing to be of service voluntarily, as in the past, and it is to these patriotic people that any further housing matters could, with advantage, be delegated, and a great saving effected. Without doubt the State made a false move in taking up the provision of houses, and the lesson is one that should serve as a wholesome caution in the future. Whatever money is henceforth borrowed, should be put to the best use and safeguarded so that no extra charge w’ould be borne by the community.