LONG-TERM LOANS

Dominion, Volume 19, Issue 238, 22 June 1926, Page 6

LONG-TERM LOANS

HELP FOR FARMERS BANK OF NEW ZEALAND’S SCHEME GENERAL APPROVAL IN AUCKLAND "Dominion” Special. Auckland, June 21. The proposal advanced by the directors of the Bank of New Zealand to create a special department and raise additional capital to enable the bank to make long-term loans on the amortisation principle, was generally approved by business men and farmers’ representatives when approached on the subject. They hailed the scheme as something urgently needed in New Zealand to tide farmers over their present economic difficulties.

"Any idea which aims to restore confidence and give assistance to the man on the land is to be welcomed,” said Mr. I. Boddie (managing director of the Farmers’ Trading Company). “At first sight the scheme seems to me to be excellent. Its success depends entirely on how it is administered. Whether or not it will be of use to settlers remains to be seen. A lot will depend on the basis of valuation, and also on what proportion of the valuation the hank is prepared to make advances. Anyone who knows anything about the economic conditions of the Dominion must realise that the Government or someone else must come to light.” "Sir George Elliot and his co-direc. tors are to be congratulated on inaugurating a scheme which is obviously in the interests of the primary producers,” stated a prominent business man in close touch with farmers and their requirements. “Of all the ups and downs which farmers have to contend with, there are none which cause more anxiety than the due dates of short-dated mortgages, with the inevitable uncertainty and expense attending new mortgages and renewals. In my opinion, a few of the advantages of such a scheme are: (1) The security of tenure with all its accompanying encouragements; (2) the enforced saving and satisfaction of feeling one’s head, a little further above water at the fend of every six months; (3) the farmer’s ordinary trading credit will be considerably improved; (4) the scheme will assist in stabilising land values. Many farms are on the market only because of farmers’ anxiety regarding mortgages.” The scheme was also approved by Mr. W. W. Massey (president of the Auckland Agricultural and Pastoral Association). He declared that the more money farmers could get at a reasonable rate of interest the greater would be production. As far as the Bank of New Zealand was concerned, it was the most progressive policy the institution had put forward in regard to the. development of land. The Dominion had reached the stage when the value of imports was closely approaching the value of exports, and he felt that with the assistance of the scheme the possibility of increased exports would be considerably enhanced. “The Government is embarrassed for want of money, and this scheme comes along at an opportune time to give assistance to people on the land,” declared Mr. John Massey (of Mangere). "There is great need of such a scheme. People who are applying for loans at present are unable to get money on favourable terms. I think the terms proposed in the scheme will meet with the general approval of all farmers.” LONDON PAPER’S COMMENT NEW DEPARTMENT APPROVED (Rec. June 21, 8.55 p.m.) • London, June 21. The “Financial News,” commenting on the movement of the shares of the Bank of New Zealand on the. Stock Exchange, approves of the decision to increase the capital. "The proposal to establish a separate department is also good, as the bank is unable to-under-take long-term mortgage business without sacrificing liquidity, while the experience of the Bank of New Zealand will enable the new department to press forward business more swiftly and advantageously than an independent concern. As the British • Government is contemplating an institution to assist agriculturists with credit facilities, the development of the New Zealand plan will be followed with close attention in Britain.”—Atis.-N.Z. Cable' Assn.