RURAL CREDIT BILL

Hokitika Guardian, 3 February 1928, Page 1

RURAL CREDIT BILL

PRIME MINISTER'S REPLY. (By Telegraph—-Per Press Association. WELLINGTON. Feb. 2. The Prime Minister (the lit Hon .J G. Coates) stated to-day that !:is attention bad been called to a report containing the substance of the remarks made by .Mr AY. J. Poison at tbr roc-ent meeting of the Dominion Ext cutive of the Xew Zealand Fnrmeix’ Union, when referring to the recent Rural Intermediate Credit legislation. “The substance of Air Poison’s complaint- appeared to be that the findings of the Royal Commission of 192-5, which investigated the systems at rural finance operative in several countries on the Continent of Europe, and also in North and South America, had not been fully embodied in the Rural Intermediate credit Act of la t session, and implying Hull that !c,gelation embodied a principle .’..'ain't which the Commission had been expressly warned. The liirl her statement w./s made by Air Poison to t ie elfect that the Prime Almister had brought down legislation which had destroyed the Commission's findings. II in clear from Air Poison’s statements that the portion of the new legislation which is objected to by him is Ilia! which provides lor Hie granting of advances to imliva.lii.u farmers. supported by snlislaclory guarantees. The report ol Ibe .-loyal Commission contain no such propo-al. but provided that advances to larnii’i's should he made through the lorinalion of Rural Intermediate Credit

Associations, consisting of' not less than 20'members, each of whom is required to subscribe for shares to a total value of one-lentil of any loan obtained by him from the Association, with a minimum of 25 £1 shares. The object of the proposed legislation was thus to encourage and promote the formation of co-operative limited liability companies, with the object of obtaining finance for their shareholders, the funds being provided from nionevs to he raised by the Rural Intermediate Credit Board and advanced to the Associations for the purpose of making loans to their members. “A special Committee agreed I bat some method was desirable to supplement the system of Rural I iitcrniedmie Credit Associations, and provision was made for the Hill for advances to iniliviilual farmers on the security ol iheir stock and chattels, supported by i guarantee, signed by one or more

approved sureties, and guaranteeing the repayment of at least 30 pin - cent ni any loan granted. Mr I'olsou s remarks appear to imply that bv the inclusion of tile additional provisions the co-operative principle has been defeated, but it cannot he too strongly emphasised that the lullcst provision has been made under the Act lor the formation of Associations exactly on the lines contemplated in the [{oval Commission's report, and the lulle.-n opportunity is afforded for the inrmat inn of sucli Associations. Mr Raison's contention that the inclusion of the additional provision has had the elfect ol nullifying the co-operative system, is not well hast’d. lue -aiccess of the scheme will he prict ieall V dependent upon the extent to which the Rural Credit Ronds commend themselves to investors, and for this reason it will he essential that ordinary business prudence shall he exercised ill the granting of loans, hut the Government can he relied on to see that such a, board is appointed to administer the Act, as well as give the fullest, consideration to the claims of tanners, and will see that, they gam the fullest benefit from the working ol lire Act. consistent with the maintenance of confidence on the part of investors. “il is true, as implied by Mr Poison. that the bonds are not guaranteed by the State, hut. the lio.’o'nmeiit has given substantial assistance to Lite scheme by making the sum of S available without, interest, lor the period of It* years, and has i po-.l polled its claim to repayment ol | tins amount i! in iav;n:r ..j i iosldi.-. in the bonds who v.ill obtain prioMito Ike Government's claim ill tills respect. "Mr Poison’s reference to tint evidence lie tendered before I lie detect Committee is not understood. h is presumed that Mr Poison :i:i * I ample opportunities to icvi.se the report ol his evidence, thus pillowing toe same course as other witnesses; mil. this being so. Mr Poison’s references to inadequate reporting is inexplicable. '‘Regarding Mr Poison’s rein a''l;-, i onccriiing the (‘list irnia nof tile Commission .Colonel Fsson). it is quite coi reel, as I slated in the House, Unit the amended scheme in the Bill, with the additional alternative objected to by Mr Poison, was concurred in by Colonel Fsson. 3he third .tieniher ol the Commission was not available to give his opinion, having died prior to the introduction of the Bill. "In conclusion, it should he remembered that tbo legislation of last session is complementary to that passed in 1020. and the two enactments give a comprehensive elfect to the recommendations of the Commission. Mr Poison’s comments reveal his own individual opinions. 1 disagree with him. anil very definitely. The legi nation has been designed in the interests of the small primary producers, and the Presidenit of the Xcw /.calami Farmers’ I'nioii should immediately fall into line, and help those who qre striving to assist Xew Zealand's stable industry. Unity v ill help dissension! and captious criticism can only result in putting hack the clock.”