AGRICULTURAL BANKS.

Taranaki Daily News, 19 June 1922, Page 2

AGRICULTURAL BANKS.

THEIR USE IN EUROPE. 'WOULD THEY SUCCEED HERE? CONDITIONS WIDELY DIFFERENT. Wellington, June “The question of instituting tural banks in New ZeaJan(| ; .i I S / discussed at the • present time.{4’lidt such institutions supplied a ed want in Europe, where they. were, first started about the middle of' Jost century, is evidenced by the success they have met with. But that . they would be as successful in New Zealand is doubtful, for conditions- lier.e.- are entirely different from those obtaining in Europe.” In these words Mr. George Elliott introduced the question* of agricultural banks to the shareholders of the Bank of New Zealand at the 'annual meeting to-day. Mr.. Elliott proceeded: In. addition to the Advances to Settlers Department of. our Government,- which has lent’ many millions on farming properties, there are in this country a number o-f co-operative farmers’ associations mainly, if not entirely, owned and controlled by farmers. These associations are widely represented throughout the Dominion, and one of their principal objects is to make advances against live stock, wool, grain, and other products of the land. In addition, there are large proprietary concerns doing a similar class of business, to say nothing of the ordinary banks which have, to a very large extent indeed, extended credits to pastoralists and agriculturists. Under normal conditions, therefore, the needs of the farming community are adequately provided for by existing organisations. Agricultural banks, as a rule, have little or no fixed capital, but obtain credit from the ordinary banks by means of joint and several guarantees entered into by the .peasantry of the district served by the agricultural banks. The experience of the ordinary banks throughout Australasia in respect to joint, and several guarantees has been by no means satisfactory. Indeed, it became necessary some time ago for the banks in this Dominion to place checks on borrowing against such guarantees, and there are many unfortunates who now rue the day they put their names to a guarantee. Doubtless an attempt would be made to get the Government to guarantee the agricultural banks. Such a guarantee would, it is to be feared, involve the Government in loss, for it would take away the personal responsibility, the strict control and close supervision that are necessary to ensure success in any such undertaking. It must be borne in mind that the psychology of the New Zealand settler is not that of the Continental peasant. Farmers in New Zealand shift from one district to another to an extent unknown in Europe, where, as a rule, son succeeds father in occupation of the same plot of land; while quite a number of our farmers have been little more than speculators, buying farms in the hope of selling at a big rise. Speculative farming does not make for stable conditions. So long, however, as farmers are prepared to shoulder the full responsibility, there is not the slightest reason why they should not try the experiment of an agricultural bank.