RURAL CREDIT BOARD

Press, Volume LXXIII, Issue 22251, 16 November 1937, Page 4

RURAL CREDIT BOARD

OPERATIONS FOR LAST

YEAR

ANNUAL REPORT

During the year ended June 30, 1937, a total of £62,032 was advanced by the Rural Intermediate Credit Board of the Dominion under all headings, compared with £66.932 for the previous year. From the inception of the scheme in 1928 to June 30, 1937, the board advanced £1,279,096, and of this amount 87.6 per cent, has been repaid, leaving £158,259 owing to the board. The volume of business reached its peak in s3l when £317,711 was advanced. There was owing to October 31, n»i. after crediting payment! receivedl under loans. £520,183. The two figures just referred to are the highest re- ' corded b,y the board. „»„„„♦ „* I According to the annual teport of the board, which has just been tablea in the House of Representatives, a steady expansion of business was shown in the earlier years of the board's operations, but there has been a decline in recent years. The reasons for this decline have been fully traversed in previous reports, and it is not necessary to refer to them here. It should be mentioned, however, that the uncertainty which has existed in the last two years regarding the future of the system and its administration has had an adverse effect on the volume of business. "The board considers that the position generally of loans granted by it and its associations is sound, and in comparatively few cases need losses be anticipated," says the report. "Such losses, if they are made, will be more than covered by the reserves which the board has set aside for the purpose. At June 30, 1937, the amount provided for this purpose was £7757 6s 7d, which represents a little over 4.9 per cent, of the advances current at that date. That it has been necessary to make such small provision discloses a very creditable position. Some associations have only a small amount of business and are encountering difficulty in meeting their expenses. The position of these will need to be considered immediately by the new administration.

"Owing to the uncertainty regarding the future of the system which has ruled for the last two. years, the board has not considered it wise to make any substantial alterations of policy or pro-cedure.-because it was not desired to embarrass the new administration in any way. Several matters have been deferred and will be brought under noticp of the new administration when the /change takes place, and some of them will require early consideration.

Redemption Fund and Reserve

"In accordance with section 39 of the Rural Intermediate Credit Act, 1927, the net profit each year has been appropriated in equal shares to the Rural Intermediate Credit Redemption Fund and the Rural Intermediate Credit Reserve. The total net profit earned by the board to June 30, 1937, and thus apportioned in terms of section 39 (1) was £34,033 5s lOd. A loss of £2323 7s 4d sustained for the year

ended June 30,1935, was met out of the Rural Intermediate Credit n^erve. "The amount invested °F t for investment, on behalf of the Rural Interred ate Credit Redemption Fund at June 30. 1937, was as follows:- £ s. d.

One-third of advance of £400,000 from the Consolidated Fund under section 16 of the act 133,333 6 8 One-half share of profits up to June 30,1937, appropriated in accordance with section 39 of the act 4 • • ",016 12 11 Interest received on investments and interest accrued to June 30, 1937 .. .- 59,736 14 0

£210,086 13 7 "The face value of the investments held and accrued interest thereon to June 30, 1937, is £207,825 18s 2d. A premium of £1330 10s 8d has been paid on the purchase of investments, but this cost is partially offset by th. premium of £1136 16s 3d received on conversion of Government securities held as at March 31, 1933. .An amount of £2067 is was held uninvested at June 30, 1937. ~ , _ ...,,„ "The Rural Intermediate Credit Reserve at June 30, 1937 £14,893 5s 7d represents the accumulated regaining hiSt-shate of profits to this date, less the loss of £2323 7s 4d in the year ended J"une 30. 1935."