The Guardian And Evening Star, with which is incorporated the West Coast Times. MONDAY, JULY 5, 1926.

Hokitika Guardian, 5 July 1926, Page 2

The Guardian And Evening Star, with which is incorporated the West Coast Times. MONDAY, JULY 5, 1926.

FINANCING THE FARMER. The proposal of tl.e Rank of No" Zealand to issue capital and debentures for the financing ol long-term loans, primarily to farmers, is one of the highest importance to primary producers. Subject to the approval of Parliament and the banks’ shareholders, the directors' proposal is the establishment of a special department to issue loans on terms, to all intents the same as those of the State Advances Department. The banks directors have decided that there is a limit to the funds of the Stats Advances Office. Its operations are necessarily curtailed l>v the fact that loans for this special department are not favourably received in London, and local borrowing is not encouraged for obvious reasons. Therefore, there being a limit to the expansion of the State

Advances system, the Bank of Now Zealand, with its enormous credits, is well able to step in and supply the necessary funds to satisfy all requirements in this direction. The scheme is the creation of a. fund of £5,625,000 which would be administered by a special department of the hank, and which would he independent of its ordinary business. The hank’s shareholders ana to he invited to" subscrie one fourth of the amount—perhaps over a period of some years—and tlio balance will bo raised as required by debentures, presumably in London. The money in this special fund will be ; loaned at 6 per cent., and the net return will he less to the extent of administration expenses and taxation—the profit-earning power of the hank, as a whole will be sufficient to pay divdends on the existing capital at present rates as well as 71 per cent, on the new capital. Parliamnet is to he asked to give statutory authority to the bank to carry out its proposals, and already, both in Parliament and out of it, objections are being raised, one being that it is an attempt to forstall agricultural banks. However, this may he, there are no agricultural hanks in operation at present, and if the Bank of New Zealand can give our farmers the use of five million pounds for development purposes, it should certainly he allowed to do so.