FINANCING THE FARMER

Northern Advocate, 2 November 1927, Page 5

FINANCING THE FARMER

INTERMEDIATE CREDIT BILL THIRD READING CARRIED. ►SLIGHT ALTERATIONS MADE. (From Our Parliamentary Special.) WELLINGTON, This Day. A clause in the Rural Intermediate Credit'Bill, permitting trust funds and public moneys to be invested in debentures Issued by the-Rural Intermediate Credit Board, was subjected to some discussion in the House yesterday, the main contention being that the Government should guarantee the bonds. The Leader of the Opposition asked' whether the object of the clause was not to enable the Public Trust Office to put money into the scheme? He submitted that the Government must assume responsibility in respect of any losses that might be incurred. The Prime Minister said that various Government funds could be invested. In regard to the debentures, it would be distinctly declared that the Government was not liable. The endeavour in connection with the Bill had been to avoid adding to the liability of the 'State. The provision was on the lines of what was being done by institutions on the Continent and elsewhere. Mr T. M. Wilford said it was inevitable that there would be a strong moral backing of debentures by the Government, The Government could not be proceeded against, of course, but the debentures would be redeemed. Mr M. J. Savage thought the clause was throw dust into the eyes of the people seeking financial assistance. The clause devolved the act of security on those least able to take the burden. The Prime Minister said he believed that trust funds would be invested just as successfully as they ’were invested in other countries. It was quite wrong to say the provision was not Worth the paper it was written on. He hoped to live to see Mr Savage disappointed in his view, Mr W. A. Veitch said the provision appeared to him to have been inserted to make the Public Debt appear less than it really was and to create a wrong impression in the minds of the bondholders. The Government might just as well repudiate its responsibility for all the paper money issued in the raising of money for State Advances. The people would not allow their trust moneys to be invested when a Government guarantee was not given. Mr J. A. Lee suggested that the clause would scare away possible investors. . Mr E. J. Howard said he would certainly think twice before investing someone else’s moneys held in trust. Mr Coates said that if the investors felt confidence in the opportunity afforded them to invest, they would very quickly buy debentures. He accused Mr Veitch of inconsistency in that he had previously declared that he believed that some system of agricultural banking was possible without the State giving any guarantee at all. The clause was agreed to. In committee on the Bill the Prime Minister moved an amendment aimed at increasing the number of members«f the board from five to seven, Mr G, W. Forbes expressed the view that the additional membership would weaken the board’s constitution and asked why such a - large board was considered necessary?''' The Prime Minister said that as time went on the board ultimately might consist of officers from each of the several interested Government Departments, including the State Advances Department, the Land for Settlements Department, and Soldiers’ Finance Department. It would be necessary to have the advice of men with administrative experience in all branches of business affecting the farming community so as to provide a really efficient organisation. It was hoped to co-ordinate all branches effected, hut the Intermediate Sural Credit Board would not be the supervising body over any other hoard. Mr W. S. Glenn favoured the alteration in the number on the hoard and said Colonel Esson, Secretary to the Treasury, should be one of the appointees. Mr Coates: “Hear, hear. Excellent.” Mr Glenn said he hoped the farmer: would also be able to appoint a representative. The Leader of the Opposition said the board really superseded the State Advances Department, wherein it was to deal only with the question of rura; intermediate credits. The State Ad vancos Department could do al the work that was necessary Instead of following the reeom mendation of the Rural Credit! Commission to that effect, the Bil proposed to set up another Board. Mr Coates said the board would pro vide the missing link in the presen' organisation. The amendment was agreed Another new clause, moved by tin Prime Minister, provided that thi chairman of the board should be ap pointed by the Government instead o by members of the board. Mr Coates said that the change ha/ been made after due consideration am it was thought fit that the Governmen should appoint the chairman durin the first years of the board’s oper.i tions. The clause was agreed to an , the Bill was reported as amendet read a third time and passed.