STATE ADVANCES.

Waikato Times, Volume 119, Issue 18898, 29 May 1936, Page 7

STATE ADVANCES.

t THE NEW CORPORATION. l HOUSING AND INDUSTRY. MINISTER OUTLINES BILL. \VELLINGTON. Thursday. A general outline of the provisions of the State Advances Corporation Bill ““5 Given by the lion. W. .\‘asli, .\iin—ister of Finance, in moving the second reading 0! the measure in the House at Representatives this evening. .\lr .\‘ash said the cancellation of! shares in the Mortgage Corporation. 'w_ould take effect from June in. The reason why that date had been selected was that share—holders had had their shares allotted to them on June 14, and it was in—tended to allow exactly one year to elapse betore closing down the corporation. The new board would function as from luly l. The principle adopted by the Government was to give shareholders the eQuivalent. either in money or stock. which they would have received had their shares not been taken over. The cost to the Government would be £381.000. It would be that sum it all ‘llad paid up their calls. but something r less because there were some who had not. The stock would have a cur—rency of 10 years and be redeemable any time prior to April. 1946. it the shareholders concerned so desired. Shareholders' Return. Shareholders would receive £ll2 105 in stock for every £IOO invested to compensate them for a reduction 01 interest from a; per cent to 4 per cent. Whether shareholders took cash or paid-up stock. they would receive a dividend. The object of the Government was to place those people who subscribed their money in the same position as it the Government had not taken over their shares. The Government would direct the policy of the corporation through the Minister, and would be responsible for the acts of the corporation. The board would manage. the Minister would control. but only at the point at which the Government felt its policy was not being given effect to would it interfere. Mr Nash said that under the existing procedure the corporation was allowed to grant loans up to a mar—gin of 66 2-3 per cent. but for rural mortgages the corporation was empowered with the authority of the Minister 01 Finance to advance beyond that margin. That procedure had to a certain extent been changed. The 66 2-3 margin. which was exclusively a commercial basis of lending. still re- ] mained. but if it was desired to makel . a greater advance. the Government would guarantee to stand any loss that might be incurred. That guarantee would be given mainly in the rehabilitation of farmers and for the building of houses. larnlng capacity. Loans to farmers for the development. of production would be based on the earning capacity or the land. Mr Nash continued. However. there would be a much sounder basis than formerly as the guaranteed price would 7’ definitely determino the earning capacity of the land. Hon. A. Hamilton (Opposition—Wallace): That. only applies to dairyinsi land. . ‘ Mr Nash: That is so at present. but the procedure will be extended later. I'tther branches of the farming industry will want to come 'under the procedure which will come into operation on August. 1 for the benefit or dairy farmers. The Bill would provide one centralised lending department, with a competent field staff to value securi—ties. The corporation could play an important part in the development of housing, although subsequently either a Bill or an appropriation would come before the House under which the Government itself would build houses to relieve the shortage which existed at present. 'The corporation could make loans to local authorities for housing purposes. There was also provision for the corporation to assist in the development 0! industry; the Minister said. The Bureau of Industries in the first place would investigate proposals and report on them to the Cabinet. which would make recommendations about any loans found to be Justified. The loan would then be administered by the corporation. Issue of Bonds. \Vith regard to the issue of bonds. .\ir Nash said 'the proposal was that they should be issued at :1 low rate or interest for long terms, and on abso—lutely gilt-edited security. The purpose of the Government was to make them guaranteed bonds. The .\ilnistcr said the cost of administration would perhaps he higher Y than 3.! 2d per cent. but he was hop< ing that in the ultimate the people would be rehabilitated to such an extent. that the loss that was apparent on paper would not be incurred. There was a shortage of houses. he said. and with the passing of the Bill care would have to be taken in watch the activilirs or the land agents, the land grnhhrrs and the land owners, Those who controlled the raw material from which houses were huilt would take their Siifll't‘ or the advantages given to tho workers by the State. "The llili is of more imporinnro than most legislation that comes ho. fore the House. it. is the third step "lung illi' rout! tho (‘mu‘rniucnt is trav—elling. ’T‘iic ilrst .\ll‘p \\.is when we too]; control at crn‘rl‘i I|llll iii" second was “lion \\:- [niacin] liw farmer in :1 Fashion so that \\l'wri it.» \‘UP‘HUKI his inml he would luv \lii‘v of sum.» i‘v‘llll‘il fur lii< Lilmui‘. .\'v-\\‘ ii is ill'i‘tui\i'.] in and him the n"t‘v‘~‘ll'\ lllttlli'V i.» on: nlrlu Itim in mi Itll Hill in rnuHu ”in host l.‘l"‘ in illl‘lli littillt'x ?: is "'l'." houses that lu‘iii- humps pms‘iltlr." “(Mini ihr .\liiiistwr. J VIEVJS OF MEMBERS. Opimsi‘i‘mx \'l'l'l'l'l 1 “Ntt’l‘ rtilillti'filh' lliti'l‘lil]~'i\'l‘.." (By 1-Npgmph - l‘rt'ss Assnriaiion.) \\'iil.l.l,\t‘»'l'li,\'. 'l‘iiursllny in mp ~t-i'i\iili t‘roi ll' livlviiv nu tip» .\isfl.‘ .\tl\.tilt"‘,~ i.n2’]w ‘nu lilii, tinHull. .\, Hamilton t'l‘l'i“lll\‘ll—\\'.l:r * inrv‘ ‘ m ”iv iluuw "iis rvening viiiphnsisml llii‘ .IIiMIIILIKVS of .1 rom—(Conllnued in next column.)

bination of State and private enter—prise. Mr Hamilton disagreed with the Minister that because Sir William ilunt. one of the joint managers or the Mortgage Corporation, was associated with other businesses he could not give an Impartial judgment concerning the corporation's affairs. “ There are dangers in a State dcpartment having big lending powers,“ added Mr Hamilton. “ Although much criticism has been levelled at the system of boards, i believe it is a good one. The separation of some of our institutions from politics is advisable. In a sense the State had fairly good control or the Mortgage Corporation. . “'Some Parts Retrograde." Mr Hamilton said he believed that. with good control. the present system would compare favourably with the ‘system to which the Minister was re‘\'crting. At. the same time he would not say the Opposition was opposed to the Bill. It was not advisable for the State to become too large a mortgagee, because once that happened complications were likely to set in. .\iortgagors could become a force in a democratic country. The Opposition is not criticising the Bill very seriously.“ concluded Mr Hamilton. “I believe some parts of the Bill are a retrograde step and that it would be better to try out the {\lortgage Corporation for a further term, ‘ruihcr than unacl it so early in its career. The State Advances Depart—.mcnt has served its day and generation, but because it was good 113 years also it is not to say it is good now." l support to the lilicrnl principles of the Bill was accoriicd by Mr 11. Atmorc ‘ tindependent—Ni‘lson). who expressed the opinion that it was absurd for thc iSiatc to pay interest, as it had done, tin private tcndinsr institutions who ‘usetl the same puiilic credit which the ‘s‘lnlc could use. i lie-establishing Equities. } The Prime Minister. the iiisht lion. t,\[. .i. Savage, thought that the corporation undcr the iiiil \\uuhi go a htlle int iurther than the old state l\ll\.llli't‘s Department. There was a liviausc in tho Hill which stated that ‘tiw hoard of the corporation inus.’ thine regard to rcprrm'ntutions manic iii. ii li_\' tho )lilll\itl‘ or i-‘lnant'c. 'i'hul tumult that thc iiou‘rnmcnt policy =\\t|l[lll iin reiircicti in cwr) art of thc .tmzirvl, it would ltL‘ managing for lhu [motile or .\'z'\\' )Tl'.ii.intl, “hunt the tluncrinncnt rt-prcscntcd. I lil'irx‘i'm; to interest mics. Mr Sav—‘uu‘t- said the timurnnirnt controlled Hitliilit- t'ri‘tlil liy .\ct ut' l‘urlitlmt’nt. it, jrcnltmn'd to in! such “hillhor it halt llllt’ courage and wisdom to giro effect in li~ auction promises that, it would ll>t‘ that i‘i'L‘llii \\'iiii care and minint.i;_'t- in llit‘ people. it. \\.is Labour's intention to re~ vsttlohsh L‘«[lllii(‘s, not to destroy them \Vouhl ilii)lil|t‘ owi- forgot the Rural Moi‘ixumirs i-‘inni Adjustment Act" The iarnn‘rs would ncvnr {ol'ch In”; were put into chains for live years." .\ii' Sinuuv‘ said he would ask the HIV-iii!“ tll' Now /.t‘ul.‘iiiii ill)! to worry alumni ‘lti‘i‘llllliiil‘h. 'l'hv) might Wm ilhl- first. round. out ihu iimrrnmcut i\\i'lli|l “Hi all thr- rest. immune it had :if‘fl MISS; ‘i‘ 'l"“"“i”"‘t ”‘“ “““"‘° . H 5 u Use .n w ~~ » [ihc Bill. . “L Mn)"; Uf