8.—13 a

The premium payable at the commencement of the policy varies with the appHcant mav anC6 ', the age of mortgagor, and the term of the loan, and the .applicant may if he so desires, pay the premium in cash. In many cases this is not .convenient and the Corporation, provided the proposal is approved by the Board of anagement and accepted by the Government Life Insurance Department will rthTrem n o th C ° r" r T™? °- the T single P™ I ™. The additional advance then repaid to the Corporation by instalments as part of the loan-monevs The protection afforded by this type of policy is the clearance of the balance of "the loan +T i l ? ° f the insured ' but is t0 b e noted that the cover extends only to the balance of principal owing under the mortgage excluding any arrears of Sbg mortgagors. 8 " k A ° <*• Of Ma"a d geStta (a) That mortgage-repayment insurance be taken out; or < ' l hat °™mary life-insurance cover of an amount sufficient to bridge the gap between the proposed loan and the ordinary lending margin be ected at tlle cost of th<:> applicant and assigned to the Corporation. J he Board is also enabled under section 34 of the Act to include a condition in respect of any loan granted that the mortgagor shall, if so required pav to the su32 tTe'Lard'thTk 0 ° ther , m „ one y s P a 7 ab] e under the mortgage, such I th nk * pessary to form a fund to be used on behalf of the mortgaged Lnertv i ' m f rance ' and other char g es * respect of the invoked piopeTt y- In a PPropnate cases this provision in the legislation is f ,^ urn ™£ now to rural applications, it is a statutory requirement that the Board of Management, m assessing the value of rural land for mortgage purposes shah ave regard primarily to the earmng-capacity of that land, and the Board's present working basis is that the earmng-capacity be assessed by reference to the average prices for farm-produce over the immediately preceding eight- to ten-year period fir r t tthe SLUS""* * " *"»"*»* * «"» Aot In its lending operations the Board has adopted a long-range policv which is considered very necessary m view of the long-term mortgage fiiLL Xh il the principal feature of its operations. Valuation of rural land by reference to earning- ° f 7mIS ,S a " atUral T to the of long-term t , If P er baps not out of place here to remark that it was customary in the past before the establishment of the Corporation, to assess the value of land' for mortgage &X S 7eZnrice a as e b W f Valuation of Land Act, 1908, virtually on the basis to thismethodT+hflt +t Weei l a + Wjll '!! g + bUyer and a willin 8 sellCT - The objection qtfljp nf , at the valu ation determined upon is influenced by the general W °\°l T , 0r P essm ™ existm g in the minds of buyers and lellerslt the if i i f n f Ug P roduce Pnces creates an abnormal demand for land wTljl J' 00 x H . so that even cautious purchasers are more or less v 11 1 11 "'j 011 S ' m a period of falling produce prices the substantial holder of land is not necessarily affected, while the man of slenderllourZ,isoften Experience has moteTth 1° P ro P on an unfavourable market, _ penence has proved that valuations measured solely on market values subiect to extreme fluctuations are dangerous, and that earmng-capacity averaged over a period of years offers a more stable and satisfactory basis. g Ihe Board feels that m carrying out the duty imposed upon it bv statute to nLXg m°h«ur]™rr pBdty of / u / ai land {t win » n ° rt not »«w*» >•< »»y «* It is this test which is in some degree responsible for the number of rural applications which it has been necessary for the Board to decline as being unsuitable. The lessons of the past as evidenced by the necessity for extensivf TfiKtT gMla " on polnt «•? to the need for recognition

12