FARM LOAM BOARD.

Putaruru Press, Volume IV, Issue 146, 19 August 1926, Page 6

FARM LOAM BOARD.

PROPOSED LEGISLATION. Opinion of Mr. F. Colbeck. According to Mr. F. Colbeck, of Kuranui road, Morrinsville, who, as a prominent member of the New Zealand Farmers’ Union, has taken. a leading part in the agitation for the establishment of an agricultural bank, the proposed legislation in connection with loans for farmers appears to be satisfactory, but the success or otherwise of the scheme depends upon how it is administered. “ Of course, this is not an agricultural bank,” commented Mr. Colbeck in reviewing the proposal to extend the operations of the State Advances Department by the formation of a Farm Loan Board. “ The only way in which the proposal resembles the banking scheme,” he said, “is the issue of bonds against securities. What we asked for is:— ' “1. Long-term loans. “2. Cheap money. “3. Elasticity. “4. Full banking powers. “ The Government has given us No. 1. “No. 2 depends entirely upon how the Act is administered. If the Government gets well behind it and gives it a gilt-edged appearance we will get cheap money. “ We. have got No. 3, the right to issue bonds for the full amount of the securities. “We have not got No. 4, but I never dreamed that we would.” He had always been of the opinion that if the agricultural bank ever became :.n established fact it would never have full hanking powers ; no agricultural bank in the world had these. He considered that there would have been no opposition to the agricultural hanking scheme if they had dropped “ that -silly claim,” as he termed it. He was quite certain that the bank could never have exercised those powers, even if they had .been entrusted to it.

Mr. Colbeck emphasised the fact that this was merely his own personal opinion, and he knew that he was in the minority, but Mr. Poison, who at first advocated full banking powers, had changed his opinion, “ so f am now at liberty to speak on this matter,” added Mr. Colbeck.

Referring to the constitution of the Farm Loan Board, which it is proposed shall be the State Advances Board supplemented by three representatives of agricultural and pastoral interests (two of long-term borrowers and one users of the proposed intermediate credit), Mr. Colbeck said that if these three men are to be Government nominees he did not know what the result would be. The success of the functions of the board depended a great deal upon who was appointed. The present board, he said, was conservative, and if the other men also were conservative the scheme would be wrecked.

He viewed with favour the proposal to establish rural advisory boards, | which would be especially useful in ' regard to valuations, but he failed to see how, in certain cases, they were going to assess the productive values, on which advances were to be made up to two-thirds of the actual productive value calculated over a period not less than five years. This system, he thought, would be quite good for farms which had been well worked for a number of years, but on unimproved places it would be guesswork, and on badly-farmed holdings where a new owner wished to farm the land properly, the basis of calculation on productive values would be unfair. He thought the provision for loaning on productive values was merely a catch phrase. The £7OOO limit for advances he considered quite large enough ; the scheme was not meant for a big man. The advance up to £500.000 towards the board’s operations, free of interest for 10 years and 5 per cent, thereafter, he considered quite generous.

The intermediate credit scheme, he was of the opinion, would be successful unless the administration was very badly carried out. Intermediate credits were popular in the United States of America, and there was nothing complicated about the system, the financing on produce being merely taken from the hands of the ordinary banks, “ but I don’t know how the banks will view it,” he added.

There was one important point, he said, and that was that there should be no political pull in the working of the board.