RURAL BONDS

Sun (Auckland), Volume III, Issue 772, 19 September 1929, Page 6

RURAL BONDS

SECURITY EXPLAINED INVESTORS ARE SATISFIED (THE SUN’S Parliamentary Reporter; WELLINGTON, Wednesday. An explanation of the method of raising funds for rural advances was given in the House today by the Minister of Finance, the Right Kon. Sir Joseph Ward, in answering a question on the subject. Mr. W. J. Poison tStratford) asked the Minister whether he would give an explanation of the attitude of the Government in regard to the sale of Rural Advances Bonds: and whether, in view of the fact that the Act clearly set out that both principal and interest were a charge upon the Consolidated Fund, and that there was no doubt about the legal position, he would make the position understandable to the investing public. Sir Joseph Ward replied that Rural Advances Bonds were secured on the mortgages and other assets of the Rural Advances Branch of the State Advances Office. This provision for security was inserted ijL the Rural Advances Act, 1926, on the recommendation of the Rural Credits Royal Commission. The issue of the bonds was governed by the Treasury certificate that such assets existed to the extent of the contemplated bond issue. The Consolidated Fund paid interest and repaid principal to investors, subsequently recovering from the State Advances Office. The sales of bonds that had already taken place give ample evidence that the security offered by Rural Advance Bonds was satisfactory to financiers and investors in New Zealand and elsewhere who had readily taken them up.