“ Captious Criticism ”

Sun (Auckland), Volume I, Issue 269, 3 February 1928, Page 16

“ Captious Criticism ”

MR. COATES ON RURAL CREDITS Reply to Farmers’ President Press Association. WELLINGTON, To-day. “ MR. POLSON’S comments reveal his own individual ITI opinions. I disagree with him, and very definitely. The Legislation has been designed in the interests of the small primary producers, and the President of the New Zealand Farmers’ Union should immediately fall into line and help those who are striving to assist New Zealand’s stable industry. Unity will help. Dissension and captious criticism can only result in putting back the clock.”

THE Prime Minister, the Right Hon. J. G. Coates, stated yesterday that his attention had been called to a report containing the substance of the remarks made by Mr. W. J. Poison at the recent meeting of the Dominion Executive of the New Zealand Farmers’ Union, when referring to the recent rural intermediate credit legislation.

ditional provisions, the co-operative principle has been defeated, but it cannot be too strongly emphasised that the fullest provision has been made under the Act for the formation of associations exactly on the lines contemplated in the Royal Commission’s report, and the fullest opportunity is afforded for the formation of such associations. “Mr. Poison’s contention that the inclusion of the additional provisions has had the effect of nullifying the co-operative system is not well based. The success of the scheme will he practically dependent upon the extent to which the rural credit bonds commend themselves to investors, and for this reason it will be essential that ordinary business prudence shall be exercised in the granting of loans; but the Governmfent can be relied on to see that such a board is appointed to administer- the Act as will give the fullest consideration to the claims of farmers, and will see that they gain the fullest benefit from the working of the Act, consistent with the maintenance of confidence on the part of investors.

The substance of Mr. Poison’s complaint appeared to be that the findings of the Royal Commission of 1925, which investigated the systems of rural finance operative in several countries on the Continent of Europe, and also in North and South America, had not been fully embodied in the Rural Intermediate Credit Act of last session, and implying that the legislation embodied a principle against which the commission had been expressly warned. The further statement was made by Mr. Poison to the effect that the Prime Minister had brought down legislation which had destroyed the commission’s findings.

SCHEME EXPLAINED “It is clear from Mr. Poison’s statements that the portion of the new legislation which is objected to by him is that which provides for the granting of advances to individual farmers, supported by satisfactory guarantees. The report of the Royal Commission contained no such proposal, but provided that advances to farmers should be made through the formation of rural intermediate, credit associations, consisting of not fewer than 20 members, each of whom is required to subscribe for shares to a total value of one-tenth of any loan obtained by him from the association, with a minimum of 25 £1 shares. “The object of the proposed legislation was thus to encourage and promote the formation of co-operative limited liability companies, with the object of obtaining finance for their farmer shareholders, the funds being provided from moneys to be raised by the Rural Intermediate Credit Board, and advanced to the associations for the purpose of making loans to their members. A special committee agreed that some method was desirable to supplement the system of rural intenmediate credit associations, and provision was made in the Bill for advances to individual farmers, on the security of their stock and chattels, supported by a guarantee signed by one or more approved sureties, and guaranteeing the repayment of at least 20 per cent, of any loan granted. CONTENTION NOT WELL BASED “Mr. Poison’s remarks appear to imply that by the inclusion of the ad-

“It is true, as implied by Mr. Poison, that the bonds are not guaranteed by the State, but the Government has given substantial assistance to the scheme by making the sum of £400,000 available without interest for the period of 10 years, and has postponed its claim to repayment of this amount in favour of investors in the bonds, who will obtain priority to the Government’s claim. REFERENCE NOT UNDERSTOOD “In this respect, Mr. Poison’s reference to the evidence he tendered before the Select Committee is not understood. It is presumed that Mr. Poison had ample opportunity to revise the report of his evidence, thus following the same course as other witnesses, and this being so, Mr. Poison’s references to inadequate reporting is inexplicable. “Regarding Mr. Poison’s remarks concerning the chairman of the Commission, Colonel Esson, it is quite correct, as I stated in the House, that the amended scheme in the Bill, with the additional alternative objected to by Mr. Poison, was concurred in by Colonel Esson. The third member of the Commission was not available to give his opinion, having died prior to the introduction of the Bill. “In conclusion. It should be remembered that the legislation of last session is complementary to that passed in 1926, and the two enactments give comprehensive effect to the recommendations of the Commission.”