RURAL CREDITS.

Press, Volume LXIII, Issue 19147, 2 November 1927, Page 8

RURAL CREDITS.

SHORT TERM LOANS. BILL IN COMMITTEE. SOME IMPORTANT AMENDMENTS rTHE PEEBB Special S«rric».] WELLINGTON, November 1. This afternoon the House of Representatives at an early stage of the proceedings resumed the Committee stage of the Rural Intermediate Credits Bill, on whi/h good progress was made. A number of amendments to some of the clauses were introduced by Governor's Message. Mr H. E. Holland (Leader of the Opposition) asked from what calling the men forming the District Boards were to be drawn. The Prime Minister replied that they would bo men well versed in farming requirements, and capable of advising farmers and of exercising some form of supervision over their operations. Mr Holland: The farmer himself could do that. The Prime Minister: A farmer would be the class of man I would look for to do the work. Eeferring to the clause empowering the Board to issue debentures to provide capital for carrying on its business, the Prime Minister, stated that a proposed amendment would make it clear that the debentureholders had a first claim on the amount advanced by the Government. In the event of the Boards being wound up, those investors would have tho first claim on the assets of the Board, consisting of the £400,000 advanced.

Trust Funds. A clause that led to some discussion was that making it lawful for trust funds and public moneys to be invested in the Board's debentures. Mr W. S. Glenn expressed the opinion that this clause would be one of the most important and useful in the Bill. The Leader of the Opposition held that should there be a failure of the scheme the Government could not afford to stand aside and accept no responsibility other than the £400,000 they had put into the fund. The Prime Minister stated that all Government Departments with moneys to invest could put them into the fund, and as to private funds, that was entirely a matter for the people concerned. "It is a question of policy," said the Prime Minister, "as to whether wo should go on borrowing to meet' the needs of settlers and piling it on to the public debt. This is an attempt to get away from that. There is nothing new or experimental about it. It has proved successful in other countries He thought it would bo agreed that it was desirable to place the primary producers on a footing that would enable them to act independently of State assistance.

"This clause is not worth the paper it' is written on," said Mr M. J. Savage (Auckland West), "and is an attempt, either consciously or unconsciously, to throw dust in the people's eyes." The Prime Minister: I fancy I have heard you say that before. Mr Savage: A good thing will stand repeating. (Laughter.) Eeplying to other points, the Prime Minister said the Bill was the one missing link in the system of credit necessary for the financing of the Dominion farmers. , Mr W. A. Veitch (Wanganui) said the object of "the clause was to make the public debt seem less than it really was. He complained that no guarantee was being given by the Government ihat would induce trustees to invest their money in the scheme. He urged that the Government should give a guarantee of security. The Prime Minister caused much amusement by quoting from Hansard of this session a speech in which Mr Veitch had advocated a diametrically opposito principle.

The Co-operative Principle. An amendment was made in Clause 35 providing that every subscriber to the Memorandum of Association should, when required by the Board, pay in cash not less than five per cent, of the value of the shares subscribed for by him. The clause previously provided that the percentage should be not less than twenty. The Leader of the Opposition contended that the amendment would undermine the co-operative principle supposed to be embodied in the Bill. Mr W. S. Glenn said that Parliament wanted the farmers to band together in co-operative efforts, but the Government were departing from that intention. The Prime Minister said he had consulted experts, who considered that there would be tio risk in reducing the percentage to five. The reduction would also make the position easier for the farmer. Regarding the provision that the loans may not be granted for periods exceeding five years, the Prime Minister said there was no doubt that loans would be granted for five years, and that the Board, if it desired, could ronew a loan. The general view of the Committee which had considered the Bill was that as much discretion as possible should be vested in the Board.

Mr J. McCombs (Lyttelton): But a man may desire to repay a loan in three months. The Prime Minister: If that is the case the experience will be contrary to that of other countries.

Individual Loans. Beferring to the new clause which authorises direct application to the Board for a loan, instead of through an Association, the Minister for Lands (Hon.'Mr McLeod) said the Government's chief anxiety was to make money available to the people urgently wanting it as soon as possible. . Mr H. E. Holland thought the guarantor would have to shoulder more than 20 per cent, of the loan, but the stock and station agents, who now had their grip on the farmer through bills over his chattels, would be in a position to force him to take advantage of the clause. /

The Prime Minister: Then you think there is some good in the Bill? Mr Holland: Yes, if one had a very powerful microscope one could find something good in it. Mr G. W. Forbes (Hurunui) said that if there were no alternative to the formation of associations the Bill would become inoperative. The stock and station agents had done a very great deal of good service for the farmers, and in helping land settlement in New Zealand. Members: "Hear, hear." The clause was agreed to.

The Board. On the amendment providing for an increase in the membership of the Board from five to seven, the Prime Minister said it would np doubt be desirable to incorporate in the Board one or two farmers, and probably one or two men with commercial knowledge. He hoped next session to submit to Parliament legislation co-ordinating all the activities, of the various'lending departments, and pending that it might