THE Wairarapa Age MORNING DAILY. SATURDAY, APRIL 26, 1913. ADVANCES TO SETTLERS.

Wairarapa Age, Volume XXV, Issue 10713, 26 April 1913, Page 4

THE Wairarapa Age MORNING DAILY. SATURDAY, APRIL 26, 1913. ADVANCES TO SETTLERS.

The Advances to Settlers Office, and the effect of what is known as "cheap money" upon the development of the Dominion, are being freely discussed in the newspapers of New Zealand just now. In some quarters it is urged that cheap money has resulted in an appreciation in the value of lands that has ibeen inimical to the best interests' of the country, and has been responsible for a great deal of the gambling that has been going on. Such a contention will not bear close 6crutiny. The most important factors in producing (.ne increase in values of land have been the consistently high prices that have ruled for the primary products of the soil, and the prosperity that these high prices have ensured. Land is worth what can be taken off it over a period of years. Until ten or fifteen years ago, landed properties were comparatively low in values. The sucosesion of "fat" years has caused them to go up and up, until to-day they are very high.

A great many people argue that they arc dangerously high, aJict that if a temporary slump in produce were to come, hundreds of settlers would go to the wall. It as to be hoped that such an unhappy position may never arise. Still, it is the duty of the Government that handles the people's money to see that it has an ample margin of security. This brings us to the crux of Tihe whole question so j far aa the Advances to Settlers Office is concerned. When this department of State was instituted, it was contended that -"• would bring down the rates of interest with a run, and would have a marvellous effect upon the development of the country. It i& true that, in many cases, it enabled persons with a fair amount of capital to pull through and eventually become independent. The advances made, however, were so small that they were practically valueless to the small man. The returns of private mortgages, which are published annually, show that, in spite of the cheap money offered by the State, mortgages for large amounts have been registered at &, 7, 8 and up to 10 per cent. Iw face of this fact, can it be seriously maintained that the Advances to Settlers Office has caused an important rediiction in the rates of interest? Had the markets not been maintained, many of those who borrowed money from the State would have met with disaster. At the present moment, tho Government is faced with rather a serious position. It cannot afford to lend money under about 5 per cent., and, to secure the interests of the country, it will require to make its advances on an ever better margin of security than in- the-past. To lend up to three-; fourths of the present value would be to take too great a risk. ..It would appear, therefore, that whatever the Advances to Ssttlers Office may ..have done in the past, it cannot continue to make advances on the same basis that it has done in the past. This will, perhaps, be a good thing for the Dominion, for th'ei-e is an abundance of private wealth awaiting investment on first-class security, and there is no good reason why this should not be utilised. If the scope Of the Usury Act were extended, and its provisions rigidly enforced, therewould be no possibility of the small man being exploited by the capitalist. In view of all the circumstances, the Government would, we think, be acting in the best interests of the country in restricting its advances, in the meantime, to small amounts, and in doing its best to encourage privat-3 lending at reasonable rates.