SHORT TERM LOANS.

Press, Volume LXIII, Issue 19142, 27 October 1927, Page 8

SHORT TERM LOANS.

RURAL INTERMEDIATE

CREDITS

bill before house,

rsrs s ASSOCIATION" TRI.SGKAM.)

• WELLINGTON. October 26. The Rural Intermediate Credit Bill was before the Hcuse of Represent*lives to-nig!}it« . .} •11 The Prime Minister, moving that the Bill bo committed, quoted extensively from the report of the Cession on Rural Credits \w i showing that the Government uas no., an-mle of other countries. \\ hctliet tn y were doing it adequately, members could sav When the Bill was in option Ho believed its effect would be to mluce interest to tamers by at least ten per cent. Much of the success of the scheme would depend upon il> administration, but, given that would furnish a basis upon , wlllc ' l lers could make a beginning on the land and so it would give an impetus to land settlement such as had nevet been given before. No Burden on the State. Some people thought the Government should find money for all forms of credit but the Government did not hold that view, and thus the scheme would not add to the indebtedness of the country. It must be of additional assistance to the farmers without creating State liabilities. This had teen rendered necessary because the whole lending business had changed curing recent years. There was a time when lenders looked for land as security, but this had not been the case for a number of years, the present ' tendency beine to put money into companies and local body debentures. It was, however, hoped that by the issue of rural credit debentures they would be able to attract baok to the fanners that stream of money that formerly flowed to the land. To do this they proposed to set up a Board of five members. This number, he thought, should be seven. There would thus be two Boards, one under the Rural Credits Act, and one under this That was necessary, because long term credit and short term credit being two entirely different systems of finance, two distinct forms of administration were necessary. They could not be mixed, and this was m line with the experience of other countries. After mentioning the provision for the setting up of District Boards, the Prime Minister went on to explain the system, of lending to associations of farmers, or to individual farmers. The main obiect of the Bill was to give relief on the co-operative _ principle where possible, but to individuals where necessaryi The.v had hoped to get the co-operation of the stock and station agents and of the banks. They had. however, been disappointed so far as the banks were concerned.

Capital for the Farmers. The Bill would provide new capital for the farmers. There were differences of opinion about some parts of the Bill, but, he was satisfied that it was a good, Bill, that it would give the small farmer cheap money, enabling him to stay on the land, and that it would encourage new settlers to go on to the land. He then proceeded to explain the clauses of the Bill. In reply to Mr Forbes, the Prime Minister said he anticipated that the administrative cost would be about a half per cent., and it was anticipated that money would be lent at from 6 to 6J per cent. The Prime Minister concluded with nil appreciative reference to the work done by the special committee which had considered and amended the Bill. Mr Savage has Doubts. Mr Savage (Auckland West) said he admitted the necessity for some system of intermediate credits, but he did not think the scheme before the House would fill the bill. He declared that the Reform Party had never been favourable to lending large sums, and were not so to-dlay. However, if they had provided machinery for doing so in this Bill, he would welcome it, but the machinery was not there. It was not so much new that was required, as it was the speeding up of the existing machinery of the State Advances Office. The basis of this Bill was weaker than the basis of tho State Advances Act, and it would bo better to give sympathetic administration to existing law than to pass new laws.

On the motion of Mr J. S. Dickson (Parnell) the debate was adjourned', and the House rose at 11.-50 p.m.

CO-OPERATIVE PRINCIPLE UPHELD. Mr J. D. Hall, president of the North Canterbury Farmers' Union, explained matters relating to tho Rural Credits Bill, now before Parliament, at yesterday's meeting of the executive of the Union. Mr Hall said the Bill was introduced in accordance -with the recommendations of the Rural Credits Commission and was referred to a Select Committee. Amongst the amendments proposed by that committee was or.e proposing that partially guaranteed farmers should have the right to borrow from the Central Board independent of the district associations. It was considered by the Dominion Executive that this would be fatal to the principles of the Bill, and the question was whether they should back up the executive. The idea of the district associations, formed for the purpose of 'their members helping each other, was a big thing and should be supported. If farmers were going to get easy loans by firms, or individuals guaranteeing not loss than 20 per cent, of the advance, it would do away with the principlo of getting together" and helping each other which ought not to be lost sight of. Mr W. W. Mulholland was of the opinion that if the amendment referred to were ineoiiporated it would ruin the Bill. Tn addition to the provision in the Hill' for regulations governing produce in store, there was wanted a Warehouse Act to enable a farmer who has wheat in a registered store to take his warehouse certificate and negotiate on the •money market if be wanted funds. Mr Hall said that this was to be provided in a separate Bill. After further discussion, it was decided to approve of the steps being taken by the Dominion Executive in supporting the co-operative principles underlying the Bill as recommended by the Rural Credits Commission.