The Daily News TUESDAY, OCTOBER 31, 1922. FINANCING SETTLERS.

Taranaki Daily News, 31 October 1922, Page 4

The Daily News TUESDAY, OCTOBER 31, 1922. FINANCING SETTLERS.

A clause added to the State Advances Bill extends the powers of the Advances Office, in the direction of lending, up to the limit of £5OO to settlers on the security of their chattels, either with or without collateral security. The duration of a loan is not to exceed five years, the interest fe to be seven per cent, (with a rebate of one-half per cent, if paid punctually), and a certain percentage of the principal is to be repaid by annual instalments. The second scheme for assisting settlers—the Rural Credits Association Bill —confers on them the privilege of assisting themselves, or, more properly speaking, one another, also to the limit of £5OO. The members of these associations are to be made jointly and severally liable for the liabilities of their associations, and the assets of the members will constitute a first charge subject to previous encumbrances. Mr. Massey has indicated that part of the additional millions that are to be placed at the disposal of the State Advances offices will bee available for assisting to finance the associations. The scheme is an adaptation of the credit associations of America and Europe, and based to some extent, it would seem, oit the operations of the advances made under the Dominion’s repatriation scheme that proved so successful. With this vital difference, however. The repatriation loans were guaranteed by one or two relatives or friends, or approved security given. The present proposal calls for a joint and several guarantee, entailing a considerable liability, which is a formidable barrier to the success of the scheme. The repatriation principle

could be followed with success in this important matter. Otherwise the scheme gives promise of serving a useful and beneficial purpose. At the same tine' it does not fully meet the need rs. would an agricultural and developin'- :-c. bank, for which there is an insist, nt' demand by the producers. By giv: the State Advances Office power to I'nd; up to £5OO on chattel security, the G - -

ernment will come into compel i I 'c.n with the various lending institutions, many of which, however, as a result of the recent slump in the markets, al > of the heavy taxation of the past fe v

years, are unable to provide further accommodation. Though the State will be able to lend money at a lower rate, it not being burdened with heavy rates and taxes as are the private concerns, there will be the disadvantage that Government methods are proverbially circumlocutory and dilatory, and may be far more in regard to chattel security, simply because the officials have not that intimate knowledge of men and farmers’ chattels that is possessed by those directly concerned with this class of work. The success of this extension of credit will depend largely upon the way in which it is administered, and past experience in matters of the kind is not at all inspiring. The new departures will certainly pave the way to the establishment of a State agricultural bank, which, properly conducted, would be of immense service in developing the resources of the country.