MONEY FOR FARMERS

Sun (Auckland), Volume II, Issue 331, 17 April 1928, Page 12

MONEY FOR FARMERS

RURAL CREDIT BOARD MEETS

NEED OF CAUTION The initial meeting of the Auckland District Rural Intermediate Credits Board was held yesterday. Present: Messrs. E. Collins, deputy of the district intermediate credit supervisor for the Auckland district: O. N. Campbell. Commissioner of Crown Lands for the VA I J Ross, farmer. St. Heliers Bay. Auckland: F. M. Waters, farmer. Papatoctoe. Mr. R. F. Ward, District Public Trustee for Auckland, is the district intermediate credit supervisor for the Auckland district. He was unavoidably absent. Writing to the board the Commissioner of Rural Credits. Wellington, advised that, though the Government was providing a substantial amount to enable the board to commence lending operations without delay, the ultimate test of the success of the new scheme would be the ability of the board to command a flow of capital from the investing public of the Dominion and investors _ abroad lor the development of its lending business. tl%us providing an uninterrupted supply of funds for the farming community. The board therefore relied upon the assistance and co-operation of the various district boards throughout the Dominion to maintain a sound standard of lending, and thus to gain and keep the confidence of investors. The board had fixed its lending rate for the present at 65 per cent., but the continuance of that rate would depend upon the board being able to raise funds from the public at a cost which would enable its lending business to be conducted at that rate upon sound lines. The special co-operative rural intermediate credit associations contemplated by the Met would be charged 6 per cent, only, but would be required to charge 65 per cent, to their members, and to use the amount resulting from this concession of interest for working expenses and establishment of reserves. In referring to the provisions of part 3 of the Act, which authorised the board to make loans direct to farmers without the intervention of associations, it was mentioned that these provisions did not appear in the Bill as originally submitted to Parliament, and that it had been suggested in some quarters that the introduction of this system of direct loans would operate against the formation of associations. These predictions had already been falsified by the formation of one association in the South Taranaki district and the active steps that were being taken in other districts to form other associations. The commissioner emphasised the fact that the provisions of part 3 of the Act were merely an extension of similar provisions contained in the State Advances Amendment Act of 1922, which authorised direct loans to farmers of amounts not exceeding £SOO. The Royal Commission of 1925 on Rural Credits had made no suggestion that these existing provisions should be repealed; and the new requirement that 20 per cent, of the loan must be guaranteed provided an additional measure of security for investors in the board's debentures.