FARMERS’ FINANCE

Hokitika Guardian, 15 March 1928, Page 1

FARMERS’ FINANCE

CONFUSION IN AIANY QUARTERS. AA’ELLINGTON, March 13. The Alinister of Finance stated today in regard to the bonds at present on sale for fanners’ finance, that enquiries reaching him indicated a general confusion of this issue with the inteiniediatc rural credits. The Alinister considered it important to explain the objects and machinery of the two Acts, viz., tlie Rural Advances Act, 1926. and the Intermediate Rural Credits Act, 1927. Tlie Rural Advances Act. of 1923, which came into operation on April Ist, 1927, deals solely with long term .first mortgages on the instalment plan, advances being made up to two-thirds •of the valuiiation of the land. Up to the present, loans of about £1,000,000 have been dealt with by the Board, luiuls having been temporarily advanced from other accounts for the purpose. First mortgage securities amounting to £600,000 are now registered and lodged in the office, and this enables the present issue of bonds to be made. The Act provides that no bonds may be issued without equivalent securities or assets being held. The Intermediate Rural Credits Act, of last session, on the other band, deals solely with short credit and financial 1 assistance by loan for terms not exceeding five years to primary producers on the security of land and chattels. Tlie State is by Act authorised to lend the Board up to £400,000 free of interest for ten years. Under this Act, no bonds have yet been offered. free capital available obviating tlie need for capital issues in the meantime.

It would have been preferable, remarked the Alinister, to have named these two Acts more distinctly, as the term “ rural ” is apparently conveying the impression that tlie two Acts are one scheme, whereas they are financially distinct and unrelated. The long term advances are financed through the State Advances Office, and the business of the Rural Advances Act is therefore quite apart from the more recent Act, which is administered in a -separate account and Department. The Alinister emphasised this point, as in some instances the coincidence of a bond issue amounting to £400,000 has erroneously 1 een connected with the £400.000 limit of the initial capital granted by the State for the intermediate credit scheme.