AGRICULTURAL BANKS

Hokitika Guardian, 30 July 1925, Page 1

AGRICULTURAL BANKS

AIR AY ILFORD’S HILL. AY ELLINGTON, July 2?. The measure introduced by the Leader of the National Party. Air A\ il--I'ord, last, session seeking to establish agricultural hanks, was read a first lime in the House In-day alter an explanatory speech by the member for Wanganui, as the mover was temporarilv absent.

Mr Veiteh said there had been a strong agitation from the farming community that il should get its finances placed on a sound looting. Unless primary products prospered the whole basis of our national finance was prejudiced. The Bill did not attempt to establish a new system, because it had operated in other parts of the world and had been a thorough success. If accompanied by a State guarantee it would create additional confidence and make it easy to raise capital. A State guarantee would involve the country in no loss, because the guarantee itself would ensure success. During tho crisis of IHAS a State guarantee was given to the Rank <d New calami, which redeemed it from a hopeless position. Conditions to-day were such that no risk such as was taken in that day could he involved. The Bank of New Zealand still held the guarantee of the New Zealand Government to the extent of L 525.000 ol its capital. The proposal of the Bill was to organise existing capital on the basis of co-operative. borrowing and lending. It. was not intended to cause inflation bv the creation of new loans. Lenders were loth to lend to individual farmers, but under the system proposed in the Bill they would have the guarantee ot a corporate security which would result in greater confidence. At June ort last there were sums to credit of current accounts in various banks totalling (.'30,000.000 not earning interest. but a large proportion of this money could be turned to lietter account through an agricultural bank for safe investment.