LAND BANKS FOR FARMERS.

Hawke's Bay Tribune, Volume XVI, Issue 88, 30 March 1926, Page 4

LAND BANKS FOR FARMERS.

In discussing yesterday the report of the British Ministry of Agriculture on the subject of establishing a system of finance for farmers observations were pretty well confined to trie question oi short-term periodic credits. The report itself, lio we ver, goes on to deal with a plan for providing long-term advances required lor the purpose of purchasing op permanently improving the land. In this regard the suggestion is to appry the principle of the Mortgage Credit institutions in Germany or of the Federal or the Joint Stock Land Banks in America. It is proposed that a Central Land Bank should be established, the object of which would be to make longterm mortgage loans through the existing joint stock banks and their branches, and to raise money for the purpose by the issue of debentures to the public. The bank would be governed by a board of directors and would bo empowered to lend money up to a prescribed period, secured upon a first mortgage upon agricultural land and buildings. It would also be empowered to issue debentures to the public based upon these mortgages, up to a fixed Multiple of its capital and surplus funds, thus creating a recognised means through which investment capital might be brought into agriculture. Loans would be made through the joint stock hanks and their branches who would act as agents for the Central Land Banks, which would also be empowered to handle the “intermediate” credit business in connection with land improvements, and the like, it is contended that tlfe scheme of the Central Land Bank would have the following advantages: (a) It would establish for the first time m Great Britain a uniiorm standard system of long-term mortgage credit for agriculture, (b) It would give new facilities to farmers who wish to purchase their holdings, by providing mortgage credit at a reasonable rate of interest in a stmlard and universally applicable form, and free from the risk of unexpected foreclosure. (c) It would create a standard agricultural investment, thus opening up a new channel through which capital could enter agriculture, (d) It would ho administered through the joint stock banks and would have the benefit oi their knowledge and experience; it would be simple- and secret—the latter a quality apparently very dear to the heart of the British farmer.