8.—9.

68

The principal executive officers of the Board in Wellington have been selected from among the senior officers of the Public Trust Office. In addition, the District Public Trustees act as local representatives of the Board, under the designation of " District Intermediate Credit Supervisors," those District Supervisors stationed at the headquarters of the districts which have been defined by the Board for the local administration of the system acting as Chairman of the District Boards, to which the central Board has delegated extensive powers of dealing locally with loan matters. In these capacities the District Supervisors bring to the Board the benefit of the knowledge of local conditions and the contact with the farming community which they have gained in the various phases of their Public Trust Office duties. Besides the duties already mentioned, each District Supervisor is, ex officio, a director of every co-operative rural intermediate credit association established in his district. In cases where, owing to the distance at which the headquarters of an association is situated from the District Supervisor's office, it is not practicable for the District Supervisor to attend each meeting of the directors, it is frequently possible to arrange for the local District Manager of the Public Trust Office to attend as his deputy. As a result of the expansion of the Board's business under all headings of advances to farmers a considerable amount of additional work has been imposed on the staff of the Office, which has been willingly performed by the officers concerned. 156. In the last annual report it was stated that progress had been made by the Board particularly in those districts where dairy-farming was the main form of farming activity. This result was contributed to by three causes. In the first place, the limit of £1,000 fixed by the Rural Intermediate Credit Act, 1927, while sufficient for the needs of the majority of dairy-farmers in regard to the class of accommodation provided by the Board, was not, as a rule, adequate for the requirements of sheep-farmers. Secondly, dairy-farmers had received considerable assistance from the dairy factories which they were supplying, in regard to the submission of their applications, particularly by the giving of the guarantee required to support direct applications under the provisions of Part 111 of the Act, thus facilitating the submission of applications in districts where associations had not been formed, although the activities of the dairy companies were not confined exclusively to such districts. Sheep-farmers and grain-growers, on the other hand, did not have the same facilities for obtaining guarantees. Lastly, the system of a loan of a fixed amount, to be liquidated over a period of years, was not quite suited to the financial needs of these farmers. Contemporaneously with the extension during the 1929 session of the limit for loans to £2,000, the Board introduced a system for " limits," much upon the lines of an overdraft system, designed to meet the special requirements of sheep-farmers and grain-growers. As a result of these developments, interest upon the part of the farmers concerned has been considerably stimulated, and additional associations have been set up in districts predominantly devoted to sheep-farming and grain-growing, or in which mixed farming is carried on, in order to facilitate the submission of applications, and a steady increase has been recorded in the business transacted with these classes of farmers. At present thirty-five co-operative rural intermediate credit associations have been formed, and additional associations are in course of establishment, the new associations including as well additional associations set up in what are exclusively dairy-farming districts. The business transacted with dairy-farmers has shown continued expansion both in regard to loans granted through the existing associations and the associations recently established, and in the business transacted upon the guarantees of co-operative dairy companies, all these classes of loans affording a practical demonstration of the application of the co-operative principle to rural finance. The discounting method has also enjoyed continued popularity with dairy companies for the purpose of providing small loans for the seasonal requirements of their suppliers. 157. A satisfactory feature of the Board's operations has been the excellent manner in which payments of interest and the prescribed repayments of principal in regard to all classes of loans have been received, arrears of payments having been reported in only a very few cases. This result is largely attributable to the careful supervision which has been maintained over the loan accounts. 158. The operations of the Board up to the 30th June, 1930, will form the subject of a separate report which will be presented to Parliament this session, in accordance with the provisions of section 76 of the Rural Intermediate Credit Act,