RURAL BANES' CAPITAL.

New Zealand Herald, Volume LIX, Issue 18234, 30 October 1922, Page 8

RURAL BANES' CAPITAL.

LOANS BY ( STAT€ ADVANCES.

GOVERNMENT'S PROPOSAL.

HOUSE PASSES THE BILL.

.—SPECIAL XBPOBTKB.]

WELLINGTON. Saturday. In moving the second reading of the Rural Credit Associations Bill in the House of Representatives this evening, the Prime Minister said it marked a new departure in this country. The Bill proposed to establish what was generally called; rural banks. The idea,was new to New Zealand, but was in operation in America and European countries with great success, Thousanda were working in Germany, Denmark and AmerioaMr. T. M. -Wilford, Leader of tho Opposition: " Not on these lines." Mr. Massey replied that there were many forms of credit associations, and he was outlining what he thought the most suitabla system for Now Zealand. The Bill limited advances to £500, and anything less would not bo any use. The basis of these associations was joint and several guarantees. They were not banks in tho ordinary sense of tho word, but required larger institutions behind them. A member of the association could get an advance in tho shape of credit receiving not cash, but a band which was negotiable in the open market. Any surplus from an association's working must be added to tho reserve fund. No dividend could be paid. Each member benefited when lie needed assistance by having tho credit or guarantee of all his fellow members behind him. „ The Government already had made two million pounds available for advances to settlers and within 12 months he proposed that another three millions should be available for this purpose, and he believed tho assistance so given would be productive of the greatest success, and that no loss would' result. This money . would be available to finance these associations. They could not bo established instantly. If o'ne was in operation within! a year, he believed its results would lead to* others \ quickly following. Tho idea behind tho Bill was to help tho small i man. Mr. Wilford said no real bank could | be of asy real use unless it had a Govern- | mont guarantee behind it. | Mr. Massey: The Government will rind | the money, which is better than a guarantee. j Mr. Wilford declared that the limit of i £500 was too small to be any benefit to I the small man. Tho joint and several I guarantee was a fatal blemieh. Why I should not the country go in for a real | agricultural bank with the State guarantee behind it? Mr. Wilford said that to establish _ a number of new banks would simply involve largo overhead expense and oring no advantage If all the State lending departments were working on table mortgage system with 1 per cent, sinking fund the country's financial condition would be stabilised. Mr. H. Holland, Leader of the Labour Party, said the Labour Party would not oppose the Bill, but would offer criticism. The Bill was long overdue. It did not go far enough, but would pave the way for a State bank with the sole right of note issue, which must eventually come. The Bill really proposed the creation of unlimited liability companies and the •joint and several guarantee was therefore fraught with grave danger to individual members. The principle of guaranteeing credit was good so far as it went,, but the Bill did nothing to deal with the mortgage problem. Mr. O. J. Hawken (Egrnont) thought the Bill would benefit dairy farmers by en. abling them to borrow money *e>t a cheaper rate on a joint ami several guarantee, which waa the mainspring of the scheme. Mr. C. E. Btatham (Dunedin Central) considered that the Bill would prove unworkable. The Bill was read a second time, put throueh its final stages and passed unamended.

ROTORUA LAKES CONTROL. VESTED IN THE CROWN. RIGHTS OF THE ARAWAS. fas TELEGRAPH.—SMn.TAI, BErORTEK.] WELLINGTON. Saturday. An important section in the native " washing-up" Bill vests in the Crown all the lakes in the Rotorua district. All the islands in the lakes shall be reserved to the natives, and the natives are granted fishing rights but shall not sell the fish without the permission of the Arawa District Trust Board, which the Act constitutes. .The board is to receive from the Consolidated Fund an annua! payment of £6000, providing that that provision is confirmed next year by in Act of Parliament. The board shall administer all funds for the general benefit of the Arawa tribe and may provide rconsy for specific purposes for the benefit of any section of the tribe. The clauses give effect to an agreement made between the Government and the Arawas. CO-OPERATIVE CONCERNS., REPORT OF LOAN DEN!E . [BY TELEGRAPH.— SPECIAL KEPOBTEB.) WELLINGTON. Saturday. "Is it correct that the Government proposes to bring down this session a Bill for the purpose of borrowing £1,500,000 to lend to the co-operative associations in the Dominion?" asked Mr. R. A. Wright (Wellington Suburbs) in the House today. If this were true, he wished to know whether- the Prime Minister aware that there was a storm of i'Mistt&tion already prevalent in the largs centres. The Prime Minister said that i:>* Binfcjment was without the slightest foo?"2ailon. FRIENDLY SOCIETIES. ISSUE OF DEBENTURES. [BI XELEOnAI'H.—SPECIAL BEI'ORTEB.] WELLINGTON, Saturday. The Friendly Societies Amendment Bill, introduced by Governor-General's Message in the House of Representatives last night, seeks to give a registered aocicty whose object it is to provide medical and surgical requisites for its members thfi right to issue debentures for the purpose of raising the capital required for commencing or extending its operations in thai, direction. Every branch of th© society'* funds may take up the debentures. Another clause gives the societies the Yjghi to invest their funds in Harbour Board debentures. No contributing society may withdraw from a medical ( society without giving six months' notice, and it is provided that all fines imposed upon members by a society pursuant of its rules shall be recoverable by summary proceedings. The Bill also provides for the appointment of a deputy-registrar. OFFICERS RETRENCHED. QUESTION OF COMPENSATION [JIY. TELEGRAPH. —SPECIAL REPORTER.] WELLINGTON. Saturday. Various petitions from officers asking for reinstatement in the Defence Department or adequate compensation for loss of office were reported upon by the Defence Committee of the House of Representatives to-day. The committee had no recommendation to make, as a matter of, policy is involved, but expressed the opinion that these officers should receive the same treatment as those retired in 1920-21, namely, that they be granted one month's pay for each year's service and the usual threa months' leajre 6a lull