RURAL CREDIT ASSOCIATIONS.

Putaruru Press, Volume VI, Issue 232, 12 April 1928, Page 6

RURAL CREDIT ASSOCIATIONS.

THE MATAMATA MEETING. No Action Taken. The Farmers’ Hall was well filled on Saturday night, when Mr. F. J. Moore, chairman of the Rural Intermediate Credit Board, Waikato centre, gave an address on the scheme, on the lines of his address at Wardville, reported last week. Mr. T. Prowse presided. Mr. Montague, a member of the Public Trust staff, accompanied Mr. Moore. [Some of the details given in the report of the Wardville meeting are not reported here.] An apology for absence was read from Mr. H. Rollett, on account of illness. The purposes of the loans are as follow: 1. The clearing, fencing, draining and general improvement of land in the occupation of the applicant. 2. The erection of buildings on such land. 3. The purchase of implements, stock, seeds, plants, and other things, required in respect of the occupation and use of land. 4. The payment of any mortgage, debt, or other liability of the applicant incurred in relation to farming operations. 5. Any other purpose in connection with farming operations that may be approved by the board. The maximum loan to one person is £IOOO. The Waikato board operates over territory from Mercer to Taumarunui, and from coast to coast. Mr. Moore explained that a man could apply direct to the board, instead of through an association, but in such event the individual required to have the loan guaranteed to the extent of not less than 20 per cent by a financial firm or individual, which guarantee was not required with loans from an association. The borrower was required to hold shares to the extent of ten per cent of the loan, with a minimum of 25 shares of £1 each, the minimum subscribed capital being 5 per cent, or Is per share. The liability of the shareholder was limited to the nominal value of his shares, and a year was given in which to pay the first 5 per cent. The minimum number required to form an association was twenty. The rate of interest on loans to members must not exceed seven per cent, but was restricted to per cent for the present, one-quarter per cent being used for administration, and one-quarter reserve to set against possible losses. The 25 shares would entitle the holder to a loan of £250; 50 shares, to £500; 75 shares to £750; 100 shares to £IOOO, maximum, or £lo loan for every £1 share. Securities could be in the form of mortgage on land, stock, or an approved personal security. It was an- . ! ticipated that in practically every case the borrower’s stock and chat-

tels would be required. The term of a loan could not be less than six months or more than five years. ( An association was governed by a board of five directors, four appointed by the members, and the supervisor, ex-officio, the fifth. One director retired each year, by rotation. Of the £400,000 advanced by the board in Wellington, one-third was reserved as security for the debenture holders and as sinking fund. The valuation fees would he fixed upon a reasonable basis. Mr. J. Bell said it seemed to him that the co-operative dairy companies had the machinery to carry out the Act. Mr. Moore replied that the formation of the association was very simple, and run on sound principles; the share capital might never be called up; there was no joint and several. To Mr. D. B. Higgins: A list of valuers would be supplied by the main board in Wellington, but no member of an association could make a valuation for that particular association. To Mr. Bush (Peria): The rate of interest would remain constant for the five years at the rate first fixed upon. Mr. Higgins commented on the liability of the uncalled capital being called up. Mr. Moore thought that such a contingency was unlikely. The re-

payments would be in half-yearly instalments. A Weak Point. Mr. J. Price said he took it that there would be a bill of sale over the stock. Was there anything in the Act to prevent a man getting rid of his stock at what he considered an opportune time. Mr. Moore said that consent for such sale would be required, but there would be nothing to prevent a mar getting a further loan, by takmore shares, to buy further stock. He would not be prevented from selling in the ordinary way of farm business.

Mr. Price thought the loan would not be of much use if a man had to wait to get permission before selling his fat lambs; he might then be “in the soup.” Mr. Moore replied that there was no provision to enable a man to sell

his stock without reference. The amount loaned would be up to 70 per cent of the security. A hearty vote of thanks was passed to Mr. Moore for his address. Mr. Moore, in returning thanks, (Continued in Next Column)

j said that although the financiers did j not consider land to be the best security he would not give much for the rest of New Zealand without the land as the basis of Dominion prosperity.