FARMERS’ FINANCE

Hawera Star, Volume XLVII, 1 May 1928, Page 9

FARMERS’ FINANCE

INTERMEDIATE CREDITS. SOUTH TARANAKI ASSOCIATION. DIRECTORS ELECTED. About 30 shareholders and prospective,, appjcaiiit-s for .shares were in attendance at the statutory opening meeting ot the South Taranaki Co-operative ltu-ral Intermediate' Credit Association, Ltd., held in the .Egmont A. and P. inoonis at Hawera to-day. The district supervisor (Mr 0. Freyburg, occupied the chair, and among those present were Mr H. C. Dickie, M.P., Messrs E. Long and S. Blake, the last two named being members. of thi2 district board.

The principal business was to elect four directors of the association. Following a general discussion, the following were electe d unopposed : Miassre J • Cocker (Eltlram), A. B. Muggeridge (iVlanutalii), F. Hoskin (Matapu), and J. D. Co n a,glen (Pi'li am a). Mr W. A. Hewitt (Hawera) was appointed lion, auditor, subject to the consent of the Central Board. At a. subsequent meeting of the board the. district supervisor (Mr 0. Freyberg) was elected chairman, and Mr E. K. Cameron, of Hawera, was appointed secretary.

‘•Tlie function of the association is to act ais an inrtemiediary between the Central Board, which originally obi-ains bho finance andl the actual borrower,” said the chairman during the course of preliminary explanation. The area, to be administered by the South Taranaki As'Soeia.ton was bounded roughly by a line between Opunake and Midhirst in the north and Wa.verf.ey in the south. LIMITED LIABILITY COMPANY. The association, which was in the nature of a limited liability company, elected honorary directors, who vc-uld dpal in a confidential manner with the individual applcations for advances, borrowing money from the. Central Board and re-lending it on security, which, for the protection of persons makin.fr investments in bond®, must be approved. One of the duties of the directors would be to gauge the chai actor of an applicant and through their knowledge of local conditions judge whether the figures ,supplied and the valuation in respect- of security warranted an advance. The loans would be secured by mortgages of land, stock, chattels or on approved personal security. In the ordinary way of lending, it was anticipated that with the local knowledge of a representative board of directors the loams .should be on a sound basks, and it was anticipated there should b© little difficulty unless another clump was experienced. The chairman explained further that at the preliminary meeting held cn Febru.arv 9 a certain number had signed the memorandum of articles These signatures, together with those of other Duhlic-spirited citizens, willing ‘ L o assist in launching the scheme, had enabled the association to be incorporated. INTEREST ON LOANS.'

Referring to the provisions of the Act as they affected the association, the chairman explained briefly that- the associations were limited liability companies, the function of which was to borrow money from the central board —tliis being advanced by the board at six per cent.—and to re-lend sums of up to £IOOO. At present the associations were advancing the money at six and a half per cent. The additional half per cent, was to be applied to the purposes of building up a reserve, and meeting management expenses. Half of this extra amount, was allowed for management expenses, the remainder having to be devoted ro building up the reserve. The Act provided for loans for practically every purpose for farming. The association, stressed the chairman, was not a- profit-earning company for its shareholders. On each share of £1 taken up it was proposed to make a call of Is to cover preliminary expenses. In addition to a borrower’s liability for the full amount advanced he was required to take up shares to the value of ten per cent, of the loan granted and was actually liable for the full value of the shares, this being a guarantee against possible losses on other securities. Thus every borrower had an interest in the whole affairs of the association in addition to his personal borrowings. As a means of creating healthy interest in the affairs of the association individually and the progress of similar organisations in other parks c-f the Dominion the speaker proposed that shareholders be circularised from tune'to time concerning the business of the association. OTHER ORGANISATIONS. Besides those in the Taranaki province, associations were formed, or were in process of formation, at Fielding, Marton, Wanganui, Maurieeville, and Te Awamutu. The project had also, been mooted in the Waikato district, though the position was uncertain there as the problem of lending money to farmers was being dealt with in a, different way. Mr. H. G. Dickie gave the opinion that the. amount allowed for reserve and expenses was insufficient. While it might be a splendid thing to be able to lend money at six and a half per cent., it was doubtful, he said, whether the management expenses could be met out of the proportion allowed and it would be advisable to charge seven per cent., placing a half per cent, to reserve and making a similar proportion available for expenses. The chairman intimated he was inclined to agree with the previous speaker, though it was intended to make advances only against absolutely approved security. The question was one which would doubtless receive the attention of the central hoard when the associations were functioning properly. Answering a further query, the chairman said that in the event- of loss the first call would be on the reserve and not on the share,holders. The amount of an advance in. relation to security would be a matter for individual consideration according to the particular merits, said the chairman in answer to Mr. A. B. Muggeridge. Explaining a point raised vrith reference to directors’ fees, the chairman said that directors would be required to act in an honorary capacity, there being no provision for payment other than in respect of travelling expenses. SUBSCRIBERS TO ASSOCIATION. The subscribers to, the South Taranaki Co-operative, Rural Intermediate Credit Association, Ltd., registered on March 25, are set out as being at the time of registration as follows: Hawera, H. G. Dickie, E. Sandford, T. A. 'Winks. J. B. Murdoch. F. Newport; Eltham, J. Ooc-ker, W. C. Carter; Araraita, F. ‘Wilson, R. E. McCann; Pi ham a, J. .D. Cbnaglen; Normanby,

H. J. Crocker; Opunake, R. J. Morris; Mokoia, C. J. Hawken; Waveriey, \Y. G. Belton; Mangatoki, O. 11. Marx, 11. J. MeCormacx, A. B. McCormack; Matapu, W. McL’Dowie, F. Hoe kin, C. R. Burt-ham; TOKaora, W. 1 s.uent.