AGRICULTURAL BANKS.

New Zealand Herald, Volume LIX, Issue 18174, 21 August 1922, Page 9

AGRICULTURAL BANKS.

Sir, —Many people will have been surprised, I think, to learn from the Financial Statement that the Prime Minister and his colleagues had committed themselves to proposals for the establishment of agricultural banks. It seems, however, that these proposals are ao far advanced that they are to be referred to the Public Accounts Committee of the House forthwith, in order that the necessary legislation may reach the statute book during the pienent session. If the neoessary legislation is intended merely to enable the members of tho Farmers' Union and other people on the land to embark upon the banking business , on their own account, it may be quite I harmless so far as the rest of the com- I munity is concerned. But if the countiy's cash or credit is involved in the scheme in any shape or form, then the Government's proposals should not be entertained by Parliament for a single moment. Mr. Massey has been warned by the very highest financial authorities that the continuance of the practice of extending State guarantees to local bodies' loans must have a very prejudicial effect upon the credit of the Dominion. The Prime Minister himself has acknowledged the soundness of this advice. Then, how much more disastrous to the country's credit would be the State backing, without State control, of such ventures as farmers' banks, farmers' shipping lines and fanners' prodnoe pools! If the farmers wish to try the banking business on their own account, by all means give them the legislative assistance they need, so long as it is compatible with the public interests; but in no circumstances let them play ducks and brakes with either the country's credit or its cash. Taxpayer.