GOVERNMENT ADVANCES TO SETTLERS OFFICE (REPORT BY THE SUPERINTENDENT OF THE), FOR THE YEAR ENDING 31st MARCH, 1907.

Appendix to the Journals of the House of Representatives, 1907 Session I, B-13

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1907. NEW ZEALAND

GOVERNMENT ADVANCES TO SETTLERS OFFICE (REPORT BY THE SUPERINTENDENT OF THE), FOR THE YEAR ENDING 31st MARCH, 1907.

Presented to both Houses of the General Assembly by Command of His Excellency

THIRTEENTH ANNUAL BEPORT AND BALANCE-SHEET. This year has again proved a record year for the amount of business transacted, the applications numbering 2,420, amounting to £999,461, as against 2,288 applications, amounting to £949,432, for the previous year, an increase of 132 applications for £50,029. The advances actually granted during the year numbered 1,929, for £767,730 4s. 7d., which exceeds those of the previous year (also a'record) by 222, for £134,277 lis. Id. The Board had up to the 31st March, 1907, authorised 19,501 advances, amounting to £6,648,480. Applicants to the number of 2,169 declined the grants offered them, amounting to £933,860, so that the net advances authorised to the 31st March, 1907, numbered 17,332, and amounted to £5,714,620. Classified according to provincial districts, the total advances authorised to date are :— Provincial District. Number of Applications. * m ° a^ o^ ncel ' £ Auckland ... ... ... ... ... 4,599 1,385,773 Taranaki ... ... ... ... ... 2,920 1,228,619 Hawke's Bay ... ... ... 1,051 295,315 Wellington ' ... ... 4,833 1,661,078 Marlborough ... ... ... ... 589 226,605 Nelson ... ... ... ... ... 242 71,200 Westland ... ... ... ... ... 346 79,575 Canterbury ... ... ... ... 1,608 467,385 Otago and Southland ... ... ... 3,313 1,232,930 Total ... ... ... ... 19,501 £6,648,480 Classified according to provincial districts, the advances authorised during the year ended 31st March, 1907, are :— Provincial District. Number of Applications. " VmOU ft "t b ° or £ ! t a anCefi £ Auckland ... ... ... ... ... 700 232,690 Taranaki ... ... ... ... ... 319 163,315 Hawke's Bay ... ... ... ... 59 16,300 Wellington ' ... ... ... ... 475 192,085 Marlborough ... ... ... ... 42 21,020 Nelson ... ... ... ... 15 5,360 Westland . ... ... ... ... 78 19,185 Canterbury ... ~, ... ... 216 84,425 Otago and Southland ... ... 194 84,810 Total ... ... ... ... 2,098 £819,190

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The advances outstanding are as follows : — Number. Amount. £ s. d. Not exceeding £1,000 ... ... ...10,330 2,497,853 011 Exceeding £1,000, but not exceeding £2,000 596 804,108 13 2 Exceeding £2,000, but not exceeding £3,000 111 252,645 9 2 Total 11,037 £3,554,607 3 3 The average amount of the advances now outstanding is £322. Number. Amount. £ s. d. On freeholds ... ... ... 6,670 2,740,747 5 6 On leaseholds ... ... ... ... 4,206 738,44111 6 On freeholds and leaseholds (combined) ... 161 75,418 6 3 Total 11,037 £3,554,607 3 3 The average freehold advance is £411; the average leasehold advance is £175 ; and the average freehold and leasehold (combined) is £468. The advances granted during the year ended the 31st March, 1907, are as follows: — Number. Amount. £ s. d. Not exceeding £500 ... ... ... 1,476 319,925 4 7 Exceeding £500, but not exceeding £1,000 ... 303 220,390 0 0 Exceeding £1,000, but not exceeding £2,000 135 186,805 0 0 Exceeding £2,000, but not exceeding £3,000 15 40,610 0 0 Total ... ... ... ... 1,929 £767,730 4 7 The average amount of the advances granted for the year is £398. Number. Amount. £ s. d. On freeholds 1,044 511,355 2 7 On leaseholds ... .. ... ... 869 246,165 2 0 On freeholds and leaseholds (combined) ... 16 10,210 0 0 Total ... ... ... 1,929 £767,730 4 7 For the year the average freehold advance is £490; the average leasehold advance is £283; and the average freehold and leasehold (combined) advance is £638. Seventy-six per cent, of the advances made during the year was for loans not exceeding £500. The total sum raised by the Government on debentures for investment on mortgage is £3,560,000. Eleven thousand and thirty-seven mortgagors are now indebted to the Department to the extent of £3,554,607 3s. 3d. in respect of principal moneys, an increase during the year of 1,051 mortgagors, amounting to £427,619 13s. 3d. The gross profits for the year ended 31st March, 1907, were £49,836 75., and the total cost of management and expenses of the Department £4,864 14s. 5d., being 014 per cent., or 2s. Bd. per £100 on the capital employed. (The cost of the previous year was 013 per cent., or 2s. 7d. per £100.) The net profits amounted to £44,971 12s. 7d., an increase on the previous year of £10,924 3s. 5d., notwithstanding the additional expenses connected with the concessions granted to the mortgagors The loan-flotation charges have been further written down out of profits by the sum of £40,000. Next year this item will disappear altogether. These eminently satisfactory results have been largely contributed to by the stoppage of the leakages in the shape of loss of interest on portion of the funds of the office, and consequently reaping the full benefit of all the funds of the office being employed in its own business; so that, notwithstanding the large amount —exceeding three-quarters of a million—of new business transacted during the year, the office has only had to resort to borrowing to the comparatively very small amount of £150,000. Additional advances are now secured by further-charge mortgages prepared in accordance with the Act of last session, free of charge to the mortgagors, except the payment to the Deeds Office of the necessary 10s. registration fee. Four hundred and fifty of these mortgages were prepared and completed during the past year very satisfactorily and without difficulty. Arrangements have now been made also whereby all mortgage-deeds securing loans will be prepared and completed free of charge to mortgagors, except the payment to the Deeds Office of a small fee of 10s. for registration. It is estimated that by this change a saving to mortgagors of fully £10,000 per annum in legal costs and fees will be effected. In addition to much time and trouble saved, far greater expedition will be given to the completion of loans, and much labour and expense saved to the Department. Sixteen freehold and nine leasehold securities have for various reasons been realised by the Department up to the present time. In most cases fairly good surpluses over and above the advances owing to the Department have been obtained and refunded. In no case has a loss been

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made, and the Department has at the present time no securities on its hands. There is, however, one small loan just now which is somewhat doubtful and may ultimately result in a small loss for the first time. Mortgagors continue to meet their half-yearly payments of interest and principal in a manner creditable to themselves and highly satisfactory to the Department. The total amount of interest collected for the year amounted to £145,071 10s. 6d. The total amount of interest collected to the 31st March, 1907, amounts to the sum of £1,043,871, in addition to the repayments of principal, £2,002,650, making a grand total of £3,046,551, besides a large sum for insurance premiums, fees, &c, without any loss having been incurred, at the same time the average amounts collected being only about £8 of principal and interest combined. The increase in the volume of business transacted during the year has been very large ; and the staff of the office have worked well, and deserve commendation for the efficient and expeditious manner in which the work has been carried out.

ADVANCES TO WORKERS BRANCH. Report and Balance-sheet. The Government Advances to Workers Act was passed on the 29th October, 1906. Applications for loans were first considered by the Board at'its meeting on the Bth January, 1907, and up to the 31st March applications for loans to the number of 160, and amounting to £42,920, were received. Since that date applications have been coming in more freely. Up co the 31st March, 1907, the Board had authorised 10? advances, amounting to £27,875. The estimated value of securities for the net authorised advances was £44,068. Classified according to provincial districts, the advances authorised are as under:— «. , , Amount of Provincial MM Applications. £ Auckland ... ... ... ... 36 9,515 Taranaki... ... ... ... ... ... 1 150 Hawke's Bay 4 1,000 Wellington ' ... ... ... 32 8,300 Marlborough ... ... ... ... ... 3 830 Nelson ... 1 225 Canterbury ... ... ... ... ... 18 5,050 Otago and Southland ... ... ... ... 12 2,805 Total ... ... ... ... ... 107 £27,875 In accordance with the provisions of the Act all mortgages are prepared in the office free of cost to mortgagors, and the work has been carried out most satisfactorily and without difficulty. The debit balance of Profit and Loss Account, £433 lis. 2d., represents the preliminary expenses of the inauguration of this branch of the Department. Only a few of the advances made had been actually paid over at 31st March, whilst the accrued interest payable at the same date is calculated on the full amount of the loan-money received for investment. Next year the income should be sufficient to cover the expenditure and yield a profit. P. Heyes, F.S.A.A., bmg„ Superintendent, Government Advances to Settlers Office, Wellington, Ist June, 1907.

BALANCE-SHEET. Statement of Liabilities and Assets at 31st March, 1907. Liabilities. Assets. £ s. d. H -. d. £ s. d. £ s. d. 3-per-cent. loan, re- Investment Account — deeniable Ist April, Advances on mort--1945, "A" .. 1,500,000 0 0 gage .. .. 5,557,287 18 1 3-per-cent. loan, re- Less repayments .. 2,005,411 13 5 deemable Ist April, 3,651,876 4 8 1945, "B" .. 500,000 0 0 Mortgage instalments receivable—overSuudrv loans .. 1,130,000 0 0 due .. .. .. .. 2,730 18 7 Advances on account j Interest receivable —overdue .. 10,631 12 6 of loan-; .. .. 430,000 0 0 Interest receivable— acoruei .. 40,498 7 7 3,560,000 0 0 Bills receivable .. .. 468 11 1 Accrued interest payable on deposits .. 20 4 7 Loan-flotation charges 26,741 7 6 Accrued interest, payable on account of Cash in hand and in public account .. 12,268 15 6 loans .. 5,706 5 6 Reserve Fund .. 50,000 0 0 Sinking Fund .. .. .. 6,453 0 0 Suspense Account .. .. 20,100 6 3 Profit and Loss Acoount 2", 936 1 1 £3,645,215 17 5 £3,645,215 17 5

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Statement of Profit and Loss Account for the Year ended 31st March, 1907. Dr. £ s. d. Cr. £ s. d. To Management Expenses Account .. 4,864 14 5 By Balance at 31st March, 1906 .. 4,417 8 6 Balanoe at 31st £ s. d. Interest Aooount, gross profits 49,836 7 0 March, 1906 .. 4,417 8 6 Net profits for the year ended 31st March, 1907 44,971 12 7 49,389 1 1 £54,253 15 6 £54,203 16 6 Transfer to sinking fund .. 6,453 0 0 Balanoe down .. 49,889 1 1 • Loan-flotation oharges written off 40,000 0 0 Balance, net profits carried forward .. 3,936 1 1 £49,389 1 1 £49,389 1 1

Statement of Interest Account for the Year ended 31st March, 1907. Db. £ s. d. & a. d. Cr. £ s. d. £ i. d. To Interest paid on loans 104,651 11 3 By Interest received on Less accrued interest at - mortgages .. 145,071 10 6 31st March, 1906 .. 3,731 10 0 Interest reoeived on 100,921) I 8 bank balances .. 396 10 8 Interest paid on deposits 60 14 10 145,468 0 y Less accrued interest at Less interest overdue and accrued at 31st March, 1906 25 14 9 31st March, 1906 .. 40,074 10 b 35 0 1 i Accrued interest payable on deposits at 105,393 10 6 31st March, 1907.. 20 4 7 Interest receivable— £ s. d. Aocrued interest payable on loans at overdue at 31st 31st March, 1907 .. .. 5,706 5 6 March, 1907 .. 10,63112 6 Interest refunded to mortgagors .. 11 7 2 Interest receivableBalance of interest, gross profits, trans- accrued at 31st ferred to Profit and Loss Aocount .. 49,836 7 0 March, 1907 .. 40,498 7 7 51,130 ci l Interest refunded to Department (income-tax charged on 3-per-cent. stock) .. .. 5 15 0 £156,529 5 7 £156,529 5 7

Statement of Management Expenses Account for the Year ended 31st March, 1907. Dr. £ s. d. Cr. £ b. d. To Advertising .. .. .. .. 10 0 0 By Consent fees .. .. 16 5 6 Audit Department .. .. 200 0 0 ' Mortgage forms 9 8 0 Insurance premiums paid by Department 26 19 6 Production fees .. .. 202 3 6 Post Office services .. .. 600 0 0 Release fees .. 227 12 6 Printing and stationery .. .. 210 13 3 Valuation fees .. 3,132 15 0 Registration and search fees .. .. 22 11 6 Balance transferred to Profit and Loss Salaries .. .. a,583 6 9 Account .. .. 4,864 14 5 Postages, &c. .. .. 21 9 5 Sundries .. .. .. .. 135 3 0 Valuation Department 6,642 15 6 £8,452 18 11 £8,452 18 11

Statement of Receipts and Expenditure for the Year ended 31st March, 1907. Dr. Receipts. fc sd. Cr. Expenditure. £ I. d. To Cash in hand and in bank at 31st , By Advances on mortgage 767.730 4 7 March, 1906 .. .. 103,03116 5 Advertising .. .. 41 15 0 Bills Receivable Account .. .. 162 06 I Audit Department .. .. 200 0 0 Consent fees .. .. .. 16 5 6 Insurance premiums paid .. 433 10 2 Income-tax on 3-per-cent. stock re- Interest on deposits 60 14 10 funded .. .. .. 5 15 0 Interest on loans .. 104,651 11 3 Insurance premiums refunded .. 406 10 8 Interest refunded 11 7 2 Interest on bank balances.. .. 396 10 3 Postages and telegrams 46 9 5 Interest on mortgages .. .. 145,071 10 8 Post Office services 600 0 0 Mortgages and instalments repaid .. 340,110 11 4 Printing and stationery .. 292 6 I Mortgage forms .. .. .. 9 8 0 Registration and search fees .. 255 0 0 Production fees .. 202 3 6 Release fees, &c, refunded 5 2 6 Public Trustee refunds— Salaries.. .. .. 3,738 6 9 Debenture Sinking Fund Invest Sinking Fund investment with Public rnent Account .. .. 245,545 0 2 Trustee .. .. 161,657 9 9 Registration and search fees .. 232 8 6 i Sundries .. .. 271 11 8 Release fees .. .. .. 232 15 0 I Suspense Account .. 26,469 10 0 Sundries .. .. 136 8 8 Valuation Department— £ s. d. Suspense Aocount .. .. 38,391 3 4 Fees .. 3,142 15 6 Temporary advances on account of Agency work .. 500 0 0 loan .. .. .. .. 150,000 0 0| 3,642 15 6 Valuation fees .. .. .. 3,231 5 II Valuation fees refunded .. .. 98 10 0 Workers branch refunds—proportion Cash in hand and in Public Account of oharges .. .. .. 288 7 10 at 31st March, 1907 .. 12,268 15 6 £1,082,470 0 2 £1,082,470 0 2 Government Advances to Settlers Office, Wellington, 27th May, 1907. P. Heyes, F.S.A.A., Eng., Superintendent, W. N. Hinchlifpe, Accountant.

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ArjDiTED'a'nd certified, subject to the following remarks: — The balance-sheet does not show how the undermentioned moneys received by the Superintendent from the Public Trustee are accounted for, — ' -■ •■(1.) The moneys amounting to £159,980 2s. 5d., which the Public Trustee received as an Assurance Fund under section 53 of the Act of 1894, and paid over during the previous year to the Superintendent for investment in mortgages as pajit_oj the Debenture Fund in accordance with tfee provisions of section 2 of the Amendment Act of. 1905. (2.) The moneys amounting to £1,824,227 12s. 5d:," which the Public Trustee reoeived under section 55 of the same Act for the Debenture Sinking Fund, and from time to time paid over to the Superintendent for investment in mortgages as part of the Debenture Fund in accordance with subsection (3). : ..... The Act of 1894, by which provision was made tor the Assurance Fund and the Debenture Sinking Fund, is the Act under which the loans were raised. It was repealed by the Act of 1906, which, though making no provision for such funds, does not provide what shall become of. the moneys previously paid to them, or that such moneys shall cease to belong to them. In the previous year's balance-sheet there was entered as for the Assurance Fund a liability of £50,000. It should have been £159,980 2s. sd„ the difference of £109,980 2s. sd. having been applied directly and indirectly towards writing-dowti the loan-flotation charges. la the present balance-sheet no Assurance Fund appears; but a sum of £50,000 is entered as a liability for the Reserve-Fund established by section 26 of the Act of 1906, though the Governor has not direoted by Order in Council, as the section requires, the sum of which such Reserve Fund shall consist. Thus, the amount of £50,000 previously entered as a liability for the Assurance Fund seems to have been converted into the liability for the Reserve Fund. There was no payment made by the Superintendent to the Public Trustee on account of the Assurance Fund between the Ist April and the 29th October, 1906—the date of the passing of the Act of 1906 —of one-tenth of all moneys received in respect of interest on investments, as required by section 53 of the Act of 1894. The balance at credit of the Suspense Account at the close of the year was £20,100 6s. 3d., of which £18,644 ss. lid. consisted of moneys retained for a time out of loans granted to mortgagors, while the balance of cash in hand and in the Public Account amounted only to £12,268 15s. 6d. The amount of £6,453 appearing as the liability for the moneys required to be applied in establishing the Sinking Fund under section 27 of the Act of 1906 was not " paid out of " the Advances to Settlers Account, as section 22 requires. This amount forms, by book-entry, part of the allocation of the balance of £49,389 Is. Id. of the Profit and Loss Account, a balance of which 645,392 2s. lOd. is derived from entries in the Interest Account in respect of interest overdue and accrued interest. J. K. Warburton, 16th July, 1907. Controller and Auditor-General.

The balance-sheet has been prepared strictly in accordance with the provisions contained in "The Advances to Settlers Act, 1906," so far as I understand them. It was hoped that these provisions, which were made in pursuance of the recommendations of the Public Accounts Committee, would have enabled the Controller and Auditor-General to give a clear certificate to the balance-sheet, which has been prepared in the form adopted in previous years, and several times approved by the Public Accounts Committee. It appears, however, impossible to comply with the requirements of the Controller and Auditor-General, and at the same time to keep true, clear, and intelligible accounts, and there is no alternative but to accept the perennial tag. P. Heyes, F.S.A.A., Eng., 18th July, 1907. Superintendent.

WORKERS BRANCH.—BALANCE-SHEET. Statement of Liahilitiks and Assets at 31st March, 1907 Liabilities. £ s. d. Assets. £ s . d. Advances on aocouut of loan .. .. 20,000 0 0 Advances on mortgage .. .. 5,490 0 0 Suspeofe Account .. .. 1,216 1 0 Interest receivable accrued .. 17 4 6 Accrued interest payable .. 168 15 4 Profit and Loss Aocount 433 n a Cash in band and in Public Aooount .. 15,444 0 8 ' £21,384 16. 4 £21,384 16 4 Statement of Profit and Loss Account for the Three Months ended 31st March, 1907. Dr. £ s. d. O. jg g d To Management Expenses Account .. 282 0 4 By Balanoe .. .. .', .. 433 }j .j Interest Account .. .. . > 151 10 10 £433 11 2 £433 11 2

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Statement of Interest Account for the Three Months ended 31st March, 1907. Dr. £ s. d. Cr. £ s. d. To Accrued interest payable on loan at 31st By Interest receivable accrued at 31st March, March, 1907 .. 168 15 4 1907 .. .. 17 4 6 Balance transferred to Profit and Loss Account .. .. 151 10 10 £168 15 4 £168 15 4

Statement of Management Expenses Account for the Three Months ended 31st March, 1907. Cb. Expenditure. £ s. d. Ds. Receipts. £ a. d. By Valuation fees .. .. 64 17 6 To Advertising .. 31 15 0 Balance transferred to Profit and Loss Postages and telegrams 25 0 0 Acoount 282 0 4 Printing and stationery 81 12 10 Salaries .. 150 0 0 Valuation Department 58 10 0 £346 17 10 i £346 17 10 , , =====

Statement of Receipts and Expenditure for the Three Months ended 31st March, 1907. Dr. Receipts. £ s. d. Cr. Expenditure. £ s. d. To Suspense Aooount .. ' .. 1,786 1 0j By Advertising .. ' 31 15 0 Temporary advanoe on account of loan 20,000 0 0 Advances on mortgage 5,490 0 0 Valuation fees .. 65 12 6 Postages and telegrams 25 0 0 Printing and stationery .. 81 12 10 Salaries .. .. 150 0 0 Su-pense Account .. 570 0 0 Valuation Department 58 10 0 Valuation fees refunded 0 15 0 Cash in hand and in Public Account .. 15,444 0 8 £21,851 18 6 j £21,851 13 6 Government Advances to Settlers Office. Wellington, 27th May, 1907. P. Heyes, F.S.A.A., Eng., Superintendent. W. N. Hinchliffe, Aocountant. Examined and found correct. —J. K. Warburton, Controller and Auditor-General.

Approximate Coat of Paper. —Preparation nil; printing (2,000 copies), £6

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Price tin.