FARMERS’ FINANCE.

Hauraki Plains Gazette, Volume XXXIX, Issue 5265, 20 April 1928, Page 2

FARMERS’ FINANCE.

RURAL INTERMEDIATE CREDIT.

AN ASSOCIATION AT PAE,ROA. With the object of considering the advisability of forming an, association at Paeroa under the Rural Intermediate Credit Act, a meeting of farmers and others interested was held at the Coronation Chambers, Pasjroa, on'Wednesday night. The convenor of the meeting, Mr W. F. Johnstone, Paeroa, presided over an attendance of 47 persons from all parts of the district. At thc commencement of the* meeting the chairman briefly outlined, the, objects of the Act as detailed in an address delivered by Mr A. M. Samuei, M.P., at Paeroa on April 4, and which lias since appeared in serial! form in these columns. The chairman also explained in detail the formation and working of local associations. To Mr W. Madgwick (Turua) the chairman said he understood that there was no provision, in the Act for dealing with a. man who took up shares and found out afterwards that his loan had” been refusCjd. Mr H. Mills, Ne-theirton, thought that application for shares could be made, but they would not actually be allotted until the loan, was granted. It was explained by Mr Wyllie, Mor' rinsville, that until the requisite niumbqr of shares, was taken up no application for a loan would be entertained. A loan was obtained on security on the lines of a bill of sale. Alli loans were repayable on a graduated scale withiin five years. Interest would be charged haTf-yeairly. Mr M. A. Carter, Awaiti, said that Mr Samuel had stated that should any amendment be necessary to the Act which would be in the interests of farmers and local associations, he anticipated no difficulty in- getting Parliament to consider it.

To Mr A. H. Rogers. Turua, the chairman said that thq share- capital taken up represented the full amount of a member’s liability in respect of amounts, owing by other members of the association.

Mr Wyllie, who had accompanied Mr Snell, deputy-.Commissioneu', Public Trustee, Wellington, during liis tour in the Waikato, stated that when an applicant’s security was being considered it would be dealt with on its merits. If a. man had assets valued at, say, £lOOO, with a mortgage of £5OO to a bank, he might possibly obtain a loan- of £2oo', but, again, much depended on the man himself. Mr M. A. Carter said he understojod that 66 per cent, of the value oif the assets would be advanced upon. A Voice: No; you are confusing your contention with the Rural Advances Act.

The chairman said that Mr Carter had made a mistake.To a question the chairman, said a high-producing herd was obviously an incentive to loan a greater sum, but a fair margin had to be allowed for any reduction in a herd. It was pointed out by Mr G. Buchanan, Paeroa, that if a man' borrowed £5OO he would have to repay the loan at the rate of £lOO a year, plus interest, and he contended that the average] farmer would have too great a handicap. Quoting from the regulations, the, chaia-man said that the board in its absolute discretion could remit interest or grant extensions of time for payment of interest on- any loan, and might compound with any person indebted to the Credits Board, for the whole or anj' part of the indebtedness. To Mr H. H. Hicks, Turua, the chairman said that an application for a- loan under £250 could be dealt with througn a local association by the district board at Hamilton. The central board was at Wellington. Mr Madgwick asked how the scheme compared with the dairy companies finance associations.

The chairman said that hei had not gone fully into the question, but the Credits Board loaned money at a 'rate of interest of 6% per cent., but there was a big difference in the amounts and terms to the borrower.

It was explained by Mr Buchanan that the .N.Z. Co-operative Dairy Co. was recognised as a financial institution., am] as such it woffld be in the company’s interests to bdrro.w the money from the board and work on is half per cent, basis. The board would advance the, money on produce, but the same, security would 1 apply to dairy companies as applied to private individuals. All loans were repayable on demand, but if no demand was, made the term of five years would stand l . A bill of sale was in the same position.

Mr Carter said that according to •Mr Samuel a loan would be called up only in the event of a. farmer going back or failing. Mr Madgwiek said that a farmer could not be held responsible for the fa'lure of an association. To Mr Hicks the chairman said that loan moneys would come through the district board to the treasurer of the local association, who would in turn pay them to the successful applicant. Moneys would be paid by Treasury cheque from the board, and there would be no exchange. To Mr Madgwiek the chairman said that one-quarter per cent, was allowed to associations for administration expense!?. The secretary-treasurer was the only paid officer, but directors of associations would.be allowed reasonable out-of-pocket expenses incurred in attending meetings. No procuration fees were/ allowed, and the district board supplied all books required in connection with the running of an association., A definite scale of charges was laid down for solicitors. It would be necessary for the association to select a solicitor and submit his name to the district board. Moist valuations for security would be carried out by the local land valuers. To Mr V. Young, Hikutaia, Mr Buchanan said that the N.Z. p.airy Company had invested £75,000 in its fl* nance company. All the money had not been let out, but it was available. To Mr Madgwiek the chairman said that In the event of a farmer culling his herd permission would have to be obtained from the district board. The proceeds of such sales would be debited to the borrower’s account, and then reloaned if necessary. The position

would be the same as that obtaining in. finance companies. Mr Mil.ls contended that provided the culled, cattle sold were replaced by good beasts there should bet no difficulty. It had been stated by Mr F. J. E. Moore, district Public Trustee, and an. ex-officio member of the district board, that the board was anxious to assist farmers with' a miq*’ mum of inconvenience. Mr Wyllie pointed out that a man* must have definite; assets before he could apply for a loan. It was proposed by Mr W. J. Noble, Tirohia, “That this meeting set up a committee to go fully into the question of the Rural Intermediate Credit Act and determine by which' method the Rural Intermediate Credit Act can best be worked so as to give the fullest advantage to farmers of this --*1 district.” Seconded by. Mr Buchanam As an amendment Mr M. A. Cartelmoved that ap association be formed forthwith. In support he contended that in the interests of those farmers who were not suppliers to a co/operative dairy company an. association would best se-ve all. The amendment was seconded by Mr G. R. Nisbett, Nejherton. Mr Hicks thought that one association would be too unwieldy, judging by that night’s representative meeting. Two associations could easily be formed, and he suggested that boundaries should be defined, say, as between Paeroa and lower Hauraki Plains. Mr Buchanan considered that it was a difficult matter to define boundaries, ant} he thought the meeting should > not rush in too huiiyiedly. Mr Wyllie said that the bugbear of the farmer was duplication of administration expenses, and he.thought that the settjng up of a committee tb consider the advisability of forming an association was a wise course to pursue. Mr Carter said he was afraid that the Dairy Company’s scheme was likely to cripple, an association It there was any delay. It was necessary to avoid the, dairy company taking away so large a per centage of fanners as to weaken an association’s member-,' ship. On the amendment being put to the meeting, seven votes were recorded, and on thq proposal being put it was lost by two votes and the amendment was declared carried. In answer to Mr Madgwick the. chairman said that in the event of thq farmers desiring to form ap association on the Plains he felt sure! Mr Samuel or Mr Moore would attend at Turua or Ngatea and address a meeting of farmers. Mr Young considered that if the whole of the Plains joined up with the Paeroa association it would not be too unwieldy. He thought it would be a difficult matter to enrol 50 members for some time to come, simply because the farmers were not .too sure of the whole business. The meeting closed with a hearty vote of thanks to the chairman, after which Mr N. R. Robson, paeroa, who is acting as secretary In the meantime, obtained seven signatures out of twenty required before a local asso-. elation can function. The reticence on the part of those who attended the meeting to sign up can be. .accounted for by the fact that a number of farmers are waiting to see what the next step by the N.Z. Cooperative Dairy Co. will be, and also to consider the possibility of forming another association on the Hauraki Plains.