The Dominion's Finance.

The Minister went on to explain that unless the Government controlled the banking and credit system, they would be materially hindered in the planning and carrying out of this policy. That was why the first major policy measure of the Government was the Reserve Bank of New Zealand Amendment Act, which gave them full control of foreign exchanges and credit within the country and made the Reserve Bank an entirely State bank.

In such a country as this the question of farming finance is all, important. Over 40 years ago the State initiated a policy whereby settlers were provided with money at particularly low interest rates, and for long periods this system has - been the greatest single factor in developing New Zealand's farm lands. Last year the former Government established a Mortgage Corporation, changed the old procedure, limited the scope of legislation for social service, and introduced private shareholders and share capital and bonds not guaranteed by the State.

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Now the Labour Government bought out the shareholders of the Mortgage Corporation, and the institution has again cotne under, direct Government control and responsibility. Corporation bonds will be State-guaranteed, so that the money may be raised at the lowest possible rates. There are safeguards so that loans cannot be used for speculation.

The Government intends to provide homes and farms for people at low cost, and provision is made in the State Advances Corporation Act for the erection of houses. Plans are being prepared for the construction of some 5,000 houses at a cost of approximately #3,000,000.