RURAL CREDIT IN BRITAIN

Sun (Auckland), Volume IV, Issue 1040, 2 August 1930, Page 27

RURAL CREDIT IN BRITAIN

FARMERS QUICK RESPONSE The Agricultural Mortgage Corporation was established as a result of the passage oi the Agricultural Credits Act, 1928, in order to make long-term loans on mortgages of agricultural land, and to grant advances under the Improvement of Land Acts, 1864 and 1899, for agricultural purposes, on as favourable terms as possible to the agricultural community. With this object, dividends on the share capital are restricted to 5 per cent, per annum, and the Government is authorised to afford assistance to the corporation in various ways, including the making of advances to it free of interest for a period of 60 years for the purpose of establishing a guarantee fund up to an amount equivalent to the paid-up capital, subject to a maximum of £750,000, and the payment for the first 10 years of its existence of an annual amount of £IO.OOO as a contribution toward administrative expenses. The paid-up capital of the corpor ation is £650.000, which has been subscribed by most of the leading banks of the country, and the negotiations with prospective borrowers for advances are conducted through their various branches.

The first report of the directors of the corporation discloses the extent to which advantage has been taken of the facilities provided by the corporation since it commenced business on January 14, 1929. The report shows that four months after the corporation had been in existence the whole of the capital available for lending had been paid out in long-term loans. Therefore, in June, 1920, the resources of the corporation were augmented by an issue at par of £5,000,000 5 per cent, debenture stock, 1959-89. Mortgage loans completed up to March 31, 1930, amounted to £4,168,590, secured against properties valued at £6,605,495, while further advances aggregating £1,137,655 had been approved subject to the completion of the necessary legal formalities. As an indication that the advances are well spread, it is stated that loans have been granted on the security of agricultural properties in every county of England and Wales, with only one exception.