RURAL CREDITS.

Hawera Star, Volume XLVII, 6 March 1928, Page 5

RURAL CREDITS.

REPLY TO CORRESPONDENT. STATEAIENT BY PUBLIC TRUSTEE. The Commissioner of Rural Intermediate Credit, Afr J. W. Afaedonald, Wellington, informs us that .Ms attention has been called -to a letter which, appeared in the ‘ ‘ Hawena Star” of the 27th ult., -relating to the Rural Intermediate Credit Act which was passed, during last session of Parliament. The Commissioner states that he does not desire to comment on the political aspects referred to in the letter, but desires to place on record certain facts relating to the working of the Act on which misconception might arise’ through the statements made by our correspondent. It is pointed out that the recent legislation is designed primarily to assist 1 the small • farmer, in that advances, either by the formation of rural, intermediate credit associations, or by direct advances to farmers supported by guarantees, are restricted to the sum of £IOOO to each borrower. It is anticipated that the Act will, be- availed of principally by those who aTe farming properties of moderate size. In the actual operation of the scheme the organisation of the Public Trust Office will be availed of to a considerable extent. * ‘ This in itself is a guarantee that no involved or ‘red tape ’ methods will be adopted in connection with the scheme, ” says the Commissioner, “The whole object will be to provide finance for those farmers who can show a satisfactory security at reasonable rates of interest and with a. minimum of expense and delay. “Afembers of the farming community who expect to avail themselves of the provisions of the Act may rest assured that both the central board and the district boards on which farming interests are fully and competently represented. - will use every -means to inculcate thrift on the part of borrowers by arranging, as each loan is granted, for reductions in the principal sum from time to time according to the means and ability of the borrower, and it is probable-in cases where loans are obtained by dairy farmers that the board -will welcome an arrangement with the dairy factories under which, a portion of the cream, cheques will be applied in reduction of their indebtedness to the board,” continued Mr Macdonald. He does not ,un- - derstand the reference of our correspondent to the Act • being - hedged around with many ramifications. The system contemplated by the Act is a simple and a straightforward one, and no unnecessary complications have -been introduced into the statute. The scheme is based on the report of the Royal Commission which visited -various countries overseas in 1925 and the early part of 1926, and it follows largely the system wMch has been in force in the United States of America for some years past, and has proved most successful.

The final note of our correspondent was to the effect that the scheme would help only the man who is in a fairly stable position. In this connection the Commissioner says that although the Government has made an advance of £400,000 free of interest for a period of ten years in order to inaugurate the scheme, the full success of the new system will depend upon the extent to which further moneys become available through fhe purchase of Rural Credit Bonds by private investors throughout the country, and if the confidence of these investors, is to be secured . it is clear that loans must be made by the board only on suitable security showing a safe margin. To adopt any other plan would imperil the success of the whole scheme by hindering the flow of money to the board for investment. At the same time, as indicated above, he contends that the farming interests are fully represented on the central board and on the district boards, and they can be relied on to see that full justice is done to any farmer who 'has a suitable security to offer, the whole object of the board being to facilitate the conduct of farming operations by making funds available at a reasonable rate of interest, and with easy terms of repayment.