The Guardian And Evening Star, with which is incorporated the West Coast Times. TUESDAY, AUGUST 17, 1926. RURAL CREDITS.

Hokitika Guardian, 17 August 1926, Page 2

The Guardian And Evening Star, with which is incorporated the West Coast Times. TUESDAY, AUGUST 17, 1926. RURAL CREDITS.

The question of clieap money for farmers was solved long ago by the Liberals under its scheme of advances to settlers. It is interesting political history to recall how the Conservative element, in opposition then, opposed the scheme tooth and nail, but it came to pass, and for a long time the country enjoyed the advantages of the legislation. So successful was it that in the course of time Mr Massey and his followers who had been such opponents of the legislation came to admire it, and in due season when Mr Massey’s party came into power, the legislation was not repealed, but extended. Money is not as cheap now a days as it was once, and a Government like the present which is so notable for its general borrowing proclivities for all subjects, has found it a difficulty to provide all the money asked for by the settlers. So an elaborate scheme of rural credits was thought out. and propounded. As is usual with the present Government, weak as it is in financial ability, the subject was relegated to a Commission, and the members were sent .abroad to

study tlio rural credit systems of other countries with the object of adopting the best features to a model system for New Zealand. The Commission has returned and has produced with little loss of time a very voluminous report supported by draft legislation to give effect to the conclusions communicated in the report. It is evident the Commission did its work very thoroughly and went into the whole subject with the greatest care. As a general study of the world systems, the report has special value, but in regard to the special conclusions reached, a result is arrived at which is very flattering to the Liberal policy of the past.. Once again the financial work of the Liberals is found to rebound to tile credit of New Zealand. A Wellington correspondent commenting on the llural Credits report says that there is a very general feeling among country members that the report of the Rural Credits Commission will not be productive of much'benefit to New Zealand. They state generally that after travelling round the world and examining every system the Commission say emphatically that the advances to settlers system in New Zealand is the best system in the world for land mortgage. The Commission expresses in effect this opinion, and indicates that our future success lies in improving our present system, rather than in adopting a new one. The report and the recommendations may he frankly summed up as nil admission that there is no cheap money in the world, and no system superior on the whole to our own. There is a proposal to reconstitute the Advances Department by adding mortgage loan bonds, and there are various other proposals. Three farmers’ representatives are to be appointed to tile Board for three years, and the suggested Bill (hat accompanies the report indicates that these in the future will he elected by the borrowers from the Association. This is an extraordinary provision, and it is very questionable whether any Government could agree to it, .seeing that the bonds are to ho Stale guaranteed. Nor is it likely that the lenders would agree, if the State "ore not guaranteeing the bonds, and it seems quite clear in the suggested legislation that the bonds are to Tie in reality guaranteed by the State. Critics state that in regard to the selling value of land the question of cither producing or selling value as being a different basis may he dismissed. It is generally recognised that there is only one value for land, and that is the price the land will bring in the open' market. As to the prospect of cheap money by the rural credits system, the general idea seems to be that there will he a feeling of disappointment, more particularly amongst fanners who are in urgent need of finance, with the Commission’s findings, but it would he wrong to blame the Co in mission for this. They were sent abroad with a free hand to discover whether any better system could he found to assist in financing the primary industries of the Dominion. The fact that they come hack with very little to offer shows that our system is an excellent one, and that the rest of the world has very little to teach us. It remains to he seen what "ill he the policy of the Government. As an alternative there arc the proposals from the. Bank of New Zealand trending in the direction desired, and in the interests of the Dominion as :i whole it would appear to he preferable to permit fhe hanking institution to give its scheme a trial as a means to. a desirable and nccessnrv end.