B.—ISA

Up to the end of the financial year now under review the subscriptions as a result of this issue amounted in all to £563,280. A short-term loan issue may seem to be at variance with the long-term mortgage policy of the Board, but in proportion to its total liabilities the amount involved will be well within the capacity of the Corporation to handle on maturity date from normal capital repayments in respect of current mortgages. 6. Management of Corporation Stock and Debentures. —It was provided by section 22 of the State Advances Corporation Act, ] 934-35, that issues of stock by the Corporation may be inscribed or registered in the books of the Reserve Bank of New Zealand, and arrangements have been made in pursuance of the special provisions in the Act for the management of all existing and future securities to be placed under the control of the Reserve Bank. The Reserve Bank will henceforth undertake the management and inscription of existing and future issues of securities by the Corporation on such terms as may be mutually agreed upon between the Corporation and the Bank and approved by the Minister of Finance. 7. Neiv Business. —The lending-rate of the Corporation for loans on mortgage remains fixed at per cent., and it may fairly be claimed that the policy of the Corporation m stabilizing long-term lending at this rate is m no small measure having the effect of regulating interest-rates throughout the whole field of mortgage investment. It may be conceded that mortgage finance has in some instances been arranged through other channels at lower rates, but these cases are comparatively few for limited periods, and in a special class verging on the " gilt-edged," with a large margin of security in favour of the lender. That this service is appreciated is evidenced by the numbers of applications received and dealt with during the year under review. The following classified table shows the applications received during the year :— Urban securities— Number. Amount. £ Erection of dwellings .. .. .. .. .. 1,854 1,463,801 Refinancing .. .. •• •• •• •• 2,187 1,590,857 Other purposes .. .. •• •• •• 1,008 580,892 5,049 3,635,550 Rural securities — £ Refinancing .. •• •• ■■ 1,890 3,784,178 Other purposes .. .. •• •• •• 791 871,470 2,681 4,655,648 Total urban and rural .. .. .. ..7,730 £8,291,198 To the above total should be added applications to the number of 777, involving the sum of £1,034,000, which were under investigation at the close of the previous year. Thus the total value of applications under investigation during the year has been little short of £10,000,000. Particulars of loans authorized by the Board of Management during the year are given hereunder : — Urban- — Number. Amount. Erection of dwellings— £ Special loans over 66| per cent, of value of security . . 525 385,708 Ordinary loans .. .. .. . ■ • • 595 404,282 Refinancing .. .. • • ■ ■ ■ ■ .. 1, 435 826,649 Other purposes ■■ 398 272,815 Hural Refinancing .. .. •• 974 2,154,195 Other purposes .. .. •• •• 212 342,217 Total authorizations .. 4,139 £4,385,866

Inset 1 — B. 13a.

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