The Auckland Star: WITH WHICH ARE INCORPORATED The Evening News, Morning News. The Echo and The Sun FRIDAY, NOVEMBER 4, 1932. RURAL CREDIT.

Auckland Star, Volume LXIII, Issue 262, 4 November 1932, Page 6

The Auckland Star: WITH WHICH ARE INCORPORATED The Evening News, Morning News. The Echo and The Sun

FRIDAY, NOVEMBER 4, 1932. RURAL CREDIT.

For the cause that lacks assistance, For the wrong that needs resistance, For the future in the distance. And the good that we can do.

In the effort to revive confidence in rural securities, an important work is being done by the Rural Intermediate Credit Board, a body which has been operating in. NewZealand for five years. This Board was set up shortly before the onset of the slump, and was criticised at first for the cautious policy it adopted and the conservative basis adopted by it in making valuations, but to-day it is able to say that its caution has been fully justified. Its organisation is well established, its finances are sound, and it has an excellent record in its relations with borrowers. As shown in the report issued last week, covering the Board's operations during the year ended June 30, it has transacted a considerable volume of business in the face of adverse conditions, and shows only a negligible loss of under £500 on loans amounting to close on £1,000,000. Local associations form a link between the Board and the borrower.

A most encouraging feature has been the growing willingness of dairy companies to guarantee applications for loans made by their suppliers, and there can be no doubt that-this support has a great deal to do with the development of intermediate credit in the Dominion. The aim is to provide credit for a term long enough to cover tho period of production and mai'keting, and it is probable that the companies are deriving valuable advantages, as the Board states, by the increase in production. This spreading of the risk makes a strong appeal to the lender, and puts the farmer in a better position to obtain credit on favourable terms. It thus helps both sides, and this shows the great value of the system. New Zealand lias been following the lead of other countries in tlvis movement, and the experience of the past five years gives ground for the belief that there should be a considerable extension of rural intermediate credit lending within the Dominion when prosperity returns. The Board has commenced its present year with an adequate supply of available funds, and is in every respect more favourably placed than other lending departments of the State. The settlers' branch of the State Advances Office, though up to the slump its losses were small, is encumbered with unprofitable mortgages, and had over £450,000 overdue in interest payments last March, and the arrears of rent due to the Crown Lands Department amounted then to more than £800,000. To bo free of such difficulties as these is one of the advantages which the Rural Credit Board enjoys, and one which it may be able to turn to the advantage of borrowers.