RURAL CREDITS

Evening Star, Issue 19664, 17 September 1927, Page 2

RURAL CREDITS

POINTS FROM BILL DETAILS OF STATE AID DISTRICT ADVISORY COMMITTEES. [From Odk Parliamentart Reporter.] WELLINGTON, September 16. .Some points in the Rural Intermediate Credit Bill not explained iu the official summary relate to tho constitution of tho board which will administer the scheme. It comprises five members, of whom the Public Trustee shall be one. Of the remainder, one at least, according to the Bill, shall have, practical farming experience. The public Trustee is to be the principal executive member, and the board will have power to appoint supervisors, inspectors, and other officers. Local advisory committees will also work in association with the central board, which will define districts and appoint in each n district intermediate credit supervisor, in these districts tho board may appoint u district committee up lu livo ui number. Their powers are thus defined:—“An advisory, committee shall advise upon matters submitted to it by the board, and may on behalf ot the board, perform such functions within the powers of the board as may from time to time be conferred upon it by the board.” Jn addition to making advances to co-operative societies, the board may carry on the business of discounting promissory notes or bills of exchange. The advance up to £250,000 from the Consolidated Fund shall be in amounts mutually agreed on between the Minister of Finance and tho board lor a term not exceeding twenty years, interest is not to be charged on any of these advances for the first ten years, but alter that interest at 5 per cent, is payable. One moiety of the Government advances is to bo invested in Government securities, and applied only to the redemption of the board’s debentures.

The Minister of Finance may, in hen of a cash advance, issue Government securities. Tho Minister is also authorised to make a preliminary advance of £5,000 for tho initial expenses of establishment, and tho board itself may similarly help co-operative associations operating under the scheme to tho extent of an advance not exceeding £25 for one year. A further grant authorised from the Consolidated Fund is not to exceed £IO.OOO for general administrative purposes. FINANCE OF THE SCHEME.

The main financial resources are to bo provided by the issue of debentures with the concurrence of the Minister of Finance The total of the debeu lures is not to exceed the amount receivcd from the Consolidated Fuad, and not repaid, exclusive of amounts credited to Redemption Fund, plu the value of all mortgages, bills of sale, and other securities held by the ooarj in the course of its business. All debentures shall constitute a fioao’..'jg charge on the board’s assets, and have priority according to the date of issue They may lie redeemed at par on specified dates, not longer than five years from the date of issue, and.the maximum rate of interest is to bo 6 per cent. The debentures may be converted into inscribed stock, and are to be exempt from stamp duty. They constitute a trustee security. Debenture holders rights arc the subject of several clauses. They are entitled to petition the Supreme Court for the appointment of a receiver if the board makes default in interest or if the audited ‘ balance-sheet' for 'any year discloses a loss on the board’s operations 25 per cent, on the total amount raised on debentures. If profits are made one-half must bo credited to the rural intermediate credit redemption fund, and be applied to tile redemption of debentures, the other half to reserve fund for general liabilities of the co-oporativc credit associations. Loons from the hoard to shareholders in rural credit associations may be granted for the following purposes:— (a) Clearing, fencing, draining, genera] improvement of lands in occupation by the applicant; (b) the erection of buildings; (c) purchase of implements, stock, seeds, plants, trees, and other things in respect to the occupation and use of the land; (d) payment of any mortgage debt or other liability incurred in relation to farming operations; (e) any other purpose in relation to fanning operations which may be approved by the board. The term of a loan may be from six months to five years. Interest is limited to a. maximum of 7 per cent. An association which makes profits must first apply them to the provision of a reserve fund, and it may pay a dividend not exceeding 7 per cent, to shareholders, if its incorporation expenses have been repaid. Shareholders may be free of their obligations if they surrender the full amount of loan, and they may receive from the board such consideration for their shores as is agreed upon between the shareholder and the board. An association with fewer than twenty members will cease to exist. Loans to co-operative societies can only bo made to those with £2,500 or more capital and at, least 100 shareholders. The term is limited to three years at a rate of interest of not more than 1 per cent, in excess of the rate paid on the board’s debentures. The general clauses provide for an a initial report to the Minister of Finance, who will present it to Parliament. The books of associations and co-operative societies indebted to llio board arc to he open to full inspection by the board’s officers, subject to a fine of £SO to every person who obstructs them in the exercise of their powers.