RURAL ADVANCES.

Auckland Star, Volume LVIII, Issue 195, 19 August 1927, Page 5

RURAL ADVANCES.

BONDS AWAITING SECURITY.

INTERMEDIATE CREDITS. (By Telegraph.—Parliamentary Reporter.) WELLINGTON, Thursday. Controverting a suggestion from a member that the Government is playing with the rural advances question, the Minister of Finance explained to the House to-night that it backed the scheme with half a million sterling, because it realised that rural advances bonds could not be issued until there was a sufficient number of mortgages available to constitute backing for the bonds. Advances totalling £100,000 had been paid out, but many approved applications were held up as the money was not needed until private mortgages reached a quarter day. When £483,000 had been granted to 244 applicants he arranged for further valuations to go on, and the bonds would soon be issued. However, there was a class of farmer very difficult to help. He might not have adequate security in the ordinary way to offer any financial institution, yet he could recover if he got help. The problem of how to deal with this class was extremely difficult. Turning to the intermediate credit proposals of last year's commission, the Minister stated that there would be a draft bill prepared giving the key to the main ideas proposed by the commission, and this would be submitted to a select committee this session. He assured members that intermediate credit was an extraordinarily thorny subject, more difficult than the rural advances scheme, and it was useless merely absorbing this section of the report without satisfying :,: niself that a scheme could be evolved of real value to the farmers. In America, where these schemes were initiated, it was quite a long process, very cautiously developed, and as it would be a new system in New Zealand he did not think it would meet with an immediate response, but would be a question of gradual development, the farmer learning to realise how to make use of the scheme. He denied suggestions that he was unsympathetic to rural advances or intermediate credit, for he had given very anxious thought to both, so that they would run smoothly and be on a satisfactory footing as soon as possible. From inquiries he had made he believed rural bonds would be popular security. They needed £200,000 worth of mortgages before making I a bond issue, and if it went off well it would relieve money for the use of advances to workers housing branch. I