8.—6

XVII

STATE ADVANCES OFFICE. The annual report and balance-sheet has been duly laid before Parliament. The result of the year's working of this useful and important Department is again most satisfactory. The privilege of being able to obtain money at a very low rate of interest is, as the report shows, enjoyed by thousands of borrowers. To settlers, for improvements on broad acres, the sum of £1,000 is available, and to those in need of a house a similar amount may be borrowed. The rate of interest is 5 per cent., a concession of \ per cent, being made to those borrowers who pay their half-yearly instalments within fourteen days of the due date. The amount that may be borrowed by any local body in any financial year is £10,000. Since the war ended, enormous demands have been made by local bodies upon the Department for loans for various public works, and the opinion has been expressed that larger advances should be made. Whilst careful consideration has been given to this view, I am convinced that it is inadvisable at the present juncture to extend the limit. The Department's funds must continue to be husbanded until there is at least some prospect of the Government being able to raise money in the open market at a reasonable rate of interest. The rate of interest charged to local authorities is still A.\ per cent. The business done during the year was as follows : 2,219 loans were granted to settlers, amounting to £1,031,855; 1,083 to workers, amounting to £420,465; and 229 to local bodies, amounting to £717,160 : in all, £2,169,480. The amount advanced since the Department commenced operations to the 31st March, 1920, is—to settlers, £18,765,780; to workers, £3,785,895; and to local bodies, £3,411,745: making a total of £25,963,420. Honourable members will remember that last session an amendment was made to the State Advances Act whereby an important concession was granted to workers by altering the definition of the term "worker." Previously a " worker " was a person whose wages during the year did not exceed £200. This limit has now been raised to £300, and, in the case of workers with more than two dependants, a further increase amounting to £20 in respect of each additional dependant. In addition, the maximum amount of loan that may be borrowed by a worker was increased from £450 to £750. This further concession to workers has been very largely taken advantage of by those in search of homes, with the result that 667 applicants have been assisted with sums totalling £284,755. Since local bodies were empowered last session, by an amendment of the Local Bodies' Loans Act, to borrow money from the State Advances Office for the purpose of erecting workers' dwellings, thirty-seven applications, amounting to £206,225, have been entertained. Altogether, the amount granted during the year under the Workers, Settlers, and Local Authorities Branches for the purpose of building and purchasing homes is £1,274,715. NAVAL DEFENCE. The experience of the late war has demonstrated the vital importance of our sea communications and the imperative necessity of making adequate provision for their protection. The light cruiser " Chatham " has been presented to the Government, and will probably be ready to leave England about the end of October for New Zealand waters. To avoid unnecessary expense, the ship will commission with a reduced complement of 334, instead of the full complement of 429. She will cruise around the coast of New Zealand, and will be available for duty in connection with Pacific islands under the jurisdiction of this Dominion. New Zealand will be responsible for the pay of officers and men, and the upkeep of the ship, the estimated yearly cost, including depreciation, being £200,000. IT.M.S. "Chatham" is a light cruiser of 5,400 tons, similar to H.M.A.S. "Melbourne" and "Sydney." She was completed at Chatham Dockyard in December, 1912, is armed with eight 6 in. guns, and has a speed of from twenty-five to twenty-six knots. In the early part of the war the " Chatham " succeeded in bottling up the German cruiser " Konigsberg " in the Bufigi Biver, where the latter ship was

iii—B. 6.