The Guardian And Evening Star, with which is incorporated the West Coast Times. THURSDAY, JANUARY 5, 1928. RURAL INTERMEDIATE CREDITS ACT.

Hokitika Guardian, 5 January 1928, Page 2

The Guardian And Evening Star, with which is incorporated the West Coast Times. THURSDAY, JANUARY 5, 1928. RURAL INTERMEDIATE CREDITS ACT.

lx 1926 Parliament passed a long-term moitgage Act authorising rural advances. In the. late session the Act authorises short-term advances to tanners and other persons engaged in primary production, ft is called ‘intei-* mediate’’ because it is to provide credits between the ordinary banking cre- ' dit payable oil demand and the longterm mortgage on land on permanent security. Between these two, moneys will be advanced, payable 'not. on demand, but in a short term, thus enabling the farmer to. obtain for a term never exceeding five years moneys required for approved farming purposes. The Public Trustee is to Iks the executive officer, termed the “Commissioner of Ifunil Intermediate Credit. He is a member ol the Rural Intermediate Credit Board. There are to be six other members of the Board appointed by the Governor-General besides the Public Trustee; of whom one at least, is to be a person having farming experience. Provision is also made in the Act for the setting up of District Boards. The principal business of the Board is to make advances to persons engaged in farming operations, and to Associations established for purposes of the Act, in order to enable such Associations to render financial assistance to their members. The Board has also power to make advances on approved security for periods not exceeding three years and at a rate not exceeding 7 per cent, per annum to approved co-operative societies with subscribed capital of not loss than £2500 arid having not less than 30 members. The Board has also power to carry on discounting operations. The funds required by the Board for purposes of making advances arc to be raised:—(a) To a maximum amount, of £400,000 from tile Treasury; only twothirds of which rail, however, lie directly applied towards making advances; the balance lieing invested in Government securities and to l>o applied to the redemption of the debentures mentioned Mow. (b) By the issue of inscribed stock or debentures bearing interest at a rate not exceeding 6 per cent, per annum and of a currency not exceeding five years up to a maximum amount of: (i) the sum raised in (a) and still outstanding pins the amount secured by mortgages, bills of exchange, and other securities the property of the Board ; or (ii) the sum of five million pounds; whichever is the less. Any twenty or more persons engaged in farming operations, may form under the Companies Act, a co-operative Rural Intermediate Credit Association, the principal object of such an Association being the borrowing of moneys from the Board or from an approved financial institution (including the Bank) and the re-lending of such moneys to its shareholders on real. chattel, or approved personal security for various approved farming purposes. Loans to any one person are restricted to ten times the nominal value of his shares (of which at least £25 must be subseri bed for by eacli such person) with a maximum of £I,OOO. At least 5 per cent, of the shares applied for must be paid up. Provision is made for the creation of reserves and the payment of dividends by such Associations (the latter not to exceed 7 per cent, per annum on paid tip capital). Farmers, whether members of an Association or not, may also raise loans on guaranteed approved chattel (with or without other )security direct from District Rural Intermediate Credit Boards out of funds supplied by the Central Board, the maximum loan to any person under this scheme being £IOOO. Loans to individuals in general are of a currency not exceeding five years and the rate of interest is not to exceed seven per cent, per annum.