RURAL CREDITS

Hokitika Guardian, 18 August 1926, Page 3

RURAL CREDITS

FARM LOAN BOARD. AUCKLAND, August 15,

Tho recommendations of the Royal Commission on rural credits were discussed, by Mr W. Goodl'cllow, managing director of the New Zealand Cooperative Dairy Company. Without further information, he said, it would be difficult to offer any considered opinion, but after reading the newspaper report, it would appear that the Commissioners had not only given the question of rural credits a great deal of consideration, but had also thoroughlyinvestigated the farm loan problems oi other countries. There was no doubt, a good deal to he said in lavour ol' the Commission’s proposed scheme, which was similar in many respects to those adopted abroad, and it was interesting to note that the Commissioner recommended a Farm Loan Hoard to he established as a separate branch of the State Advances Office. That, in his opinion, was a. good idea, and would ho much more satisfactory than the setting up of a new and altogether separate organisation. The Farm Loan Board, Mr Good fellow said, would no doubt arrange for considerable sums to he available for long term mortgages by the sale of securities to city people. It was doubtful, however, it such a. scheme would he as satisfactory from the borrowers’ point of view ns the existing State A<l : viinccs Department. The Farm Loan Board would borrow money locally, whereas, the Advances to Settlers Department in the past had largely depended on British capital, borrowed at the lowest possible rate of interest, and in consequence, loaned out at a bcdiock figure. So much money was needed for long term mortgages, that the question naturally arose, “Would it he possible for tho Farm Loan BoarcLto borrow anything like the. sum required fsuy £10,000,000) locally, without raising the rate of interest? Tt would appear that the country was too new and that there was not yet sufficient accumulated capital available to ensure the raising locally of stich a sum. “The question to he decided.” Air Goodfellow concluded, “is whether it will he hotter to extend the Advances fn Settlers Department, which has ,‘riven excellent service at very low cost or introduce a new scheme, which will he a. good deal more complicated and undoubtedly more costlv to operate.