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Hokitika Guardian, 13 July 1928, Page 2

"The obverse side side of ‘credit’ is ‘debt.’ By offering more credit you are getting the* farmers more deeply in debt, and some consider that at present the farmers are too much tied up with debt. The remedy* is not more credit, but lower priced credit,’’ was one of the remarks made by Professor A ,H. Tocker in an address on "Rural Credit” at a meeting of the Canterbury Agricultural Science Club. In the opening portion of his address, Professor Tocker briefly outlined the part playfed by credit in business, and the manner in which the trade of the world ]-jad developed in proportion to tho

development of credit. The extension of credit did not mean, he said, an extension of the things a farmer wanted ; the extension of credit created purchasing power, but without tho goods to meet it prices went up. A farmer required three kinds of credit. To buy his farm ho required money for a long term., which took the form ot mortgage. Ho required intermediate credit from six months to five years to buy implements, to make permanent improvements, and to buy stock. He required short-term credit to finance' him during the period of production until the harvest. In the course of references to the facilities provided for meeting the farmers’, requirements in these matters, Professor Tocker said that it was a great drawback that there was no orgnised mortgage market in New Zealand —some definite place where the borrower could go and get a mortgage at the ruling rate of interest. There was no such place in the Dominion, and he was not sure that they were going to get such a tilling. As to facilities for intermediate credit, lie said that recent legislation had not yet proved very effective. As regards mortgages he sugg'T'fed that some firm or company should finance mortgages by an issue of bonds, a proportion of which would be repayable by ballot each year. A blanket mortgage totalling £IOO,OOO financed by bonds' would be much more convenient to the investor than tho present individual mortgage, as tho bonds could be realised in the open market if necessary. Regarding tho co-operative banks in operation in some parts of Europe, lie commented that the like conditions did not exist in New. Zealand—farmers in a district did not farm the same land for generations. Ho had the impression that the spirit of independence was too great amongst New Zealand farmers for them to adopt the conditions connected with such banks The real difficulties in connection with rural credits in New Zealand, he said in his concluding remarks, were: (1) Lack of security due to having -borrowed heavily in the past This had left the margin of security too narrow. The investor was not going to lend to the farmer on terms less favourable to him (the investor) than he could get elsewhere.; for instance, by investing in local body loans. (2) The scarcity of capital. There was a big demand for capital for all sorts of purposes, and the demand could bo met only from' the savings of the people. (3) Lack of confidence. Prices for farm products fluctuated considerably, and farming, both ns to area- anti number employed, was contracting, and not expanding.