The Banner-Democrat. [volume] (Lake Providence, East Carroll Parish, La.) 1892-current, 1901-03-30
THE STATE LENDS MONEY.
HOW hUSTRALASIAN FARMERS Bot
ROW FROM THE GOVERNMENT.

HOW kUSTRALASIAN FARMERS BOT
ROW FROM THE GOVERNMENT.
Kew Zealand Gets the Funds In England
at Low Rate and Lends Them to Colo.
nists at a Moderate Profit-System
Works Well.
We are all of us familiar with the
appearance of governments in the ca
pac1ty OF borrowers of money, but few
| persons are aware that within the last
six years, no less than five Australia
sian colonies have undertaken the OPP
| posite function; namely, that of lend
| ing money to farmers who can furnish
security. The colonies to which we
refer are New Zealand, West Aus
tralia and New South Wales; we
name them in the order in which the
interesting experiments were made.
We may take by way of example the
New Zealand act, which was the first
law on the subject, and under which,
up to March, 1900, nearly $4,000, 900
had been lent. The money is advanced
on first mortgage on land used for
farming, dairying or market gardening.
No urban and suburban land used for
building or manufacturing may be
taken as security, neither is any lend
ing done on personal property. The
essence of the transaction is that the
New Zealand Government is able to
borrow funds in England at low rate
of interest and can lend them to col
Onists at a figure somewhat higher
but far below the rate of eight or ten
per cent. which mortgagors on landed
property were formerly obliged to pay
The advances made by the government
are Of two kinds, fixed loans and in
stalment loans. The former are for
fixed periods. not exceeding ten years,
and do not differ much from ordinary
private mortgages at five per cent.
Only about 100000 have been lent in
this way. The more characteristic fea-
ture Of the New Zealand act is the
system of instalment loans under
which upward of $4,000, 900 have been
advanced. This system not only en-
ables the farmer to borrow, but pro-
vides the machinery for extricating
him from his Indebtedness. Under the
instalment plan the borrower pays
only five per cent. interest; but his
yearly payment is actually at the rate
OF six per cent, one per cent. of which
goes to a sinking fund to repay the
principal. Thus seventy-three half
yearly payments discharge the debt in
thirty-six and half years. The gov
eminent loan office is attractive to the
small mortgagor, not only by reason
of the low rate of interest, but also
because of the low fees charged for
inspecting and valuing property Of
fered as security. Only $3.50 is charged |
to the applicant for $500 or less. and |
but So where the sum asked for does |
not exceed $3.50; $3.50 between 81, $50
and $4,000, and $40 for anything up
to the maximum amount Of $4,000.
The legal fees on mortgaging and re-
leasing are just as small. The humblest
class of borrower, he whose loan does
not exceed $500, gets off with the
payment of about Sc. For this sum
his mortgage is prepared and perused,
his title searched, and all registration
work done. Should the loan be above
$500, but not above $1,000, an ad-
ditional So is charged, and on sums
between $1,000 and $4,000, the total
cost comes to about So When the
mortgage is released, the fee in all
cases is but S1.25. We should here
state that fixed loans contracted under
the New Zealand act must never ex-
coed half the estimated value Of the
to be mortgaged. In the case
Of instalment loans, the advance may
De- equal to three-fifths Of the value ,
IF the security If it be freehold, and
20 half the value Of the lessee's inter-
eSt where the security Is leasehold. .
What safeguard is there against over !
7aluation? The Board, which alone !
AN authorize a loan, relies, not only [
IN the reports of it's own valuers, but ,
IN the independent valuations made {
~ the Government Land Tax Depart {
nent, the valuations of which, made I
IS they are for taxing purposes, have /
'een scrutinized, challenged, wrangled j
yer and reduced. To show that the
ystem works well, we need only say {
bat on March 81, 1900. the Govern q
nent Loan Office was able to report /
hat no securities had been thrown q
Jack on its hands. Here, then, is one c
f the demands put forward by Kansas O
'opulists actually and successfully t
arried out.-Collier's Weekly.