NOT RUSHED

Evening Post, Volume CVI, Issue 5, 6 July 1928, Page 10

NOT RUSHED

RURAL CREDIT BONDS SUPPORT OF THE BANKS ME. HOLLAND CURIOUS The position with reference 'to rural credit bonds and the interest of the Associated Banks in the success of the rural advances scheme was dealt with in the House of Representatives yesterday. In moving his amendment of no-confi-dence in the Government, the Leader of the Opposition (Mr. 11. E. Holland) referred to the raising of the loan of £400,000 for rural advances, and said that the extension of the time for the closing of the loan apparently meant that the loan had been unsatisfactory. It would be interesting if the Minister of Finance would say who had subscribed tho bonds, as it had been stated later that they had been fully subscribed. Sir George Eliott had stated that the support of the farmers, many of whom could subscribe, was negligible, but that the Bank of New Zealand had taken up a large portion. Would the bank state how much it had taken up? . . . ■ . The Prime Minister (the Eight Hon. J. G. Coates): "The bank could satisfy your curiosity." ' Mr. Holland: "No doubt, because I have been told from an authority whom I believe ia fairly reliable that only about £25,000 was subscribed by the public, and that the Bank of New Zealand under-wrote the balance at £93 10s." If that were so,.then the bank had good reason to be satisfied, at the security. If the £400,000 had been issued at the same price as the recent £5,000,000 loan, the rate of interest would have been £4 19s 8d instead of £5 19s Id. If the money had been raised on the basis of the Wellington Ci;y Council's last loan, the country would' have received £16,000 more without any additional'interest whatever. The Rural Advances Act had been practically a dead letter. Sir George Eliott had said that theßank of New Zealand would render every assistance to the Rural Intermediate Credit Board that the Government wanted. Had the Associated Banks rendered that assistance? He did not believe the Minister of Finance would say that the Bank of New Zealand had rendered the amount it had promised in connection with rural credit. The silence of the Minister indicated that that was so. Mr. Holland at this stage read a letter dated 24th February, 1928, addressed to a bank manager, which read as follows: The manager must not solicit applications for these bonds, as the bank is at present most desirous of building up our own fixed deposits. I do not wish applieatiQn < forms or prospectuses displayed in the office. A postscript said that a poster might be exhibited in the bank chamber., ■ Replying to Mr. Holland, tUe ; Minister of Finance (the Hon. W. Downie Stewart) said that the Government was not behind with the applications for rural advances, which were being dealt with as they came in. That scheme was working quite satisfactorily. The Leader of the Opposition had suggestedthat the Rural Advances Branch had been a failure. Mr. Holland:' "In the beginning." ' "As a matter of fact," said Mr. Stewart, "the Department is working quite satisfactorily." It had been on the recommendation of the Royal Commission that the bonds were secured on the mortgages granted and not on the public revenues. That/ had not become a. matter of difficulty, and the only person who had discussed the question as to whether the bonds were safe or hot was Mr. Poison. It had been upon the recommendations of the Commission of which Air. Poison was chairman' that the present- system was followed. The bonds were marketable, and they were selling slowly. Applications were being received from abroad. . Mr. W. E. Parry: "There is not a rush for them?" - . ' . Mr. Stewart: •'' Not in New Zealand.'' Whatever bonds the Bank of New Zealand took up had been acquired on the ordinary terms available to the general public.' The bank had taken-them up on the terms of tho prospectus, and there was no special concessionl to the bank. .. '<, -. . • ..-. .: