WELLINGTON NEWS

Hokitika Guardian, 9 February 1928, Page 4

WELLINGTON NEWS

RURAL CREDITS. (Special to “ Guardian ”.■> AYKLLLNGTOX, Feb. 0. .Mr \V. (I. Poison, Chairman of the Dominion Executive of the Fanners’ l iiion, in dealing with rural credits at a meeting of that body on February 1 said: " I want to enter an emphatic protest against the intermediate credit legislation. It is no credit to the Government. The Prime Minister has given a, pledge that if the commission brought unanimous recommendations they would Is: put into effect. In laet .Mr Coates has overlooked the unanimous recommendations based on sound lines as the result of world-wide investigations by the commission and introduced

something that the commission was expressly warned against." The members of the commission m giving evidence emphasised the need of fostering the cooperation groups and the danger of dealing with the individual. The Mon. .J. G. Coates iu his reply stated that the new legislation which provided for the granting of advances to individual farmers was supported by .satisfactory guarantees. The report of the commission contains no such provision, hut it was suggested that adviinet's to tanners should he made through the formation of Rural Intermediate Credit Association.', consisting of not more than 20 members. The object of the proposed legislation was to encourage and promote the formation of co-operative limited liability companies with the object of obtaining finance for the farmer shareholder'. The essential feature of this system, according to Mr CoatC'. is the supervision which ran he exercised by members of the association over the financing and mode of working adopted and also the provision of the share capital of the association to meet the possible deficiencies on the loan. .Mr Poison contended that dealing with individuals would mean the practical destruction of the co-oeprat ivc principle which was so necessary. The provision which enabled stock and station linns and others to guarantee 20 per cent ol the loan, and push their clients on to the hoard, was unsound. Either they will do unsound business and (limini-h the value of their land, or else safe business, such as would he valueless to

the farmer. The Parliamentary Committee. Mr l oates contended, after hearing evidence came to the conclusion that some method was desirable to supplement ihe system of Rural Intermediate Credit A-'oeiat ions. The Committee was sai-l-lied that in a small country like New Zealand, with a comparatively scattered population, dilliculty would he experienced di limling a sufficient number of farmers, in any ntto district, to form an u.'sueiation. so nullifying the desire of the Government to assist the tanning industry with ready finances. It was the opinion of the Committee that advances to individual farmers on the security of their stock chattels, supported hv a guarantee signed by one or more approved sureties, and guaranteeing the repayment of any loan granted was necessary to meet the needs of the farmer who had a good security to oiler. lint provision was made fur associations to he formed, and recommended by the commission, •and giving them the necessary power to function. As proof of the fact that the provisions are. fully effective and are known to the members of the larming community, it is stated that the Prime Minister has been approached from more than one source by persons who intimated their intention of forming

.Mr Poison states that the whole sitci ess of the legislation depended on the oversight of a man's neighbours who would he in a group with him. 'lhe State is not behind the bonds iu any

way. lie also makes it appear that the new portion of the Act. added by the Parliamentary Committee not only militated against 10-operative principles hut would ilsell lead to unsound financing and relorrcd to a provision which wlil enable stock and station and other linns to guarantee 20 per cent ol the loan and push their clients on to the hoard. Mr (oates contended that advances and other lending bodies established by the Government during the lajst thirty years have a personnel which'Mr Poison does not apparently know. Mr Poison thinks the financing might in the alternate he done on such a conservative basis as to lx: valueless to the farmer, hut the Government can he relied upon to see that a hoard is appointed to administer the Act such as will give the fullest consideration to the claims of farmers ami see that they gain the fullest benefit, from the working of the Act consistent with maintenance of confidence on the part, ol investors. This duel on the part of tie i .'intending part ies is quite unseemly and is iiiit calculated to inspire the confidence of the borrowers or the investors. fi would he interesting to know where the money is being derived which the Rural Credits Intermediate Hoard is to lend to fanners. A certain sum of money was placed at the disposal of the Hoard and until this has been absorbed, or very nearly so, it would he awkward to approach the public for finance. In any ease it is doubtful whether the country can find money for the purpose, for it must he remembered that New Zealand is very hard-tip and those who have money to invest are becoming very careful in the class of securities in which they invest. Those rural credit securities will have nothing at the hack til them and will scarcely appeal to those with lands to invest. I