The Waikato Times FRIDAY, MAY 20, 1936. STATE ADVANCES

Waikato Times, Volume 119, Issue 18898, 29 May 1936, Page 6

The Waikato Times FRIDAY, MAY 20, 1936. STATE ADVANCES

The State Advances Corporation Bill will remove all private interests by repurchasing the shares now held in the National Mortgage Corporation, and the administration, instead of being independent of political influence will be directly under the control of the Government. The procese of centralising authority which has been pushed ahead with vigour, must now be practically complete, and the Dominion must await the results. The private shareholders will have no ground for complaint because the terms outlined by the Minister of Finance are reasonable, and there are some aspects of the measure that probably will be generally accepted. The decision to guarantee any further bond issues, when made by the Corpora: tion. should enable that body to secure the money at the lowest possible rate, and, in any case, the Government would not be able to refuse tingmcial assistance if it should be required so that, in a sense, the State was behind the first bond issue. The State now will have to show any guarantee as a contingent liability. The plan to provide assistance for industries “that need and deserve help” \’. ill have to be most carefully examined. The State could hardly provide capital for any business competing with other establishments in the Dominion, and, in view of the Prime Minister’s statement regarding the provision of a subsidy for shipping companies on the Pacific run, there will have to he a general policy laid down as to the extent to which the State will exercise control. Mr Savage stated that the Government would require that if it sub—sidised shipping. Presumably the same conditions will he demanded if assistance is given to any other form of enterprise. - The housing plan also will have to be scrutinised. Judging by the Minister’s speech the lessons of the past few years have been ignored. The losses incurred have been greatest where the margin of security was least. That was only to be expected, but the State has had to stand the loss, or carry the heavy risks of capital losses. The best course would be for the authorities to tell the Dominion frankly the net results of the housing plan brought down by the Reform Government when advances were made up to 95 per cent. It will probably be found that these houses form the greater part of the 3,600 dwellings that had reverted to the Office by March 31, 1935, representing a capital investment of £2,836,000. In the light. of that experience it is difi‘icult to follow the reasoning when the Minister states that, if necessary, the advances would be 100 per cent. It is all very well for the Minister of Finance to state that “we are not concerned with margins.” As they occupy the position of trustees they should be extremely careful. These are some of the outstanding items in an important measure, and it is to he hoped that the community will be given an opportunity to study the proposals in detail.