CREDIT SOCIETIES.

New Zealand Herald, Volume LXIII, Issue 19404, 12 August 1926, Page 12

CREDIT SOCIETIES.

CONSTITUTION AND POWERS. PROCEDURE FOR BORROWING. COMMISSION'S SUGGESTIONS. [BY telegraph.—special reportee.] WELLINGTON, Wednesday. The following suggestions aro made by the Rural Credits Commission for the formation and conduct of rural intermediate credit associations:— (1) Membership should be confined to bona-fide farmers who aro known to be honest and industrious and whoso solvency is beyond question. (2) The Farm Loan Board must be satisfied with the individual standing of applicants before granting applications for registration. (3 Financial institutions who agree to do business with co-operative rural intermediate credit associations are to be supplied with the names of the directors, list of members and copies of the association's rules and regulations. (4) The local association must interest itself in the use and repayment of advances and also see that the security is not deteriorated. (5) When the real security tendered is considered in any way lacking or inadequate personal securities or additional collateral must bo demanded. (6) The provision of a reserve fund against bad debts is essential to protect members against their contingent liability, and if after the first year a suitable sum is not being placed to reserve the Farm Loan Board must* check the activities of the association concerned. The following procedure should bo followed:—The borrower will make application to the directors of the local association, on which, as previously stated, the Farm Loan Board is to be represented. Tho form of application will be prescribed by the Farm Loan Board and must include a complete statement of assets and liabilities and all necessary information. The directors of the local association will consider all tho matters usually taken into consideration by prudent financial institutions before making loans, i.e., obtain reports from their appraisers and from the Farm Loan Board's supervisor, inquire into the financial position of the applicant, his personal character, the nature of the security, tho prospects of success and the like. If considered satisfactory and a loan is granted, the borrower must lodge his note of hand, together with such collateral as is deemed necessary to fully and adequately secure the advance, with tho secretary and treasurer of the local association. The local association may obtain the amount of the advance from one or other of the financial institutions doing business in the district on a bill signed by the chairman of the local board of directors and endorsed by the Farm Loan Board's district representative. The Farm Loan Board supervisor must, inter alia, satisfy himself that the securities deposited with the local association are in order, tako possession of the bills and deposit them with the bank with which the account of the local association is Kept, for collection on due date or until such time as the issue of relative collateral trust debentures bocojmes Accessary, when the Farm Loan Board may instruct tho course to bo pursued. WAREHOUSE CONTEOL. EXPLANATION OF SYSTEM. INTEGRITY OF RECEIPTS* [BY TELEGRAPH.—SPECIAL REPORTER.] WELLINGTON, Wednesday. Tho system of warehouse control proposed by the Rural Credits Commission in its draft New Zealand Warehouse Bill provides for the licensing and bonding of public warehouses storing agricultural products under conditions intended to establish the integrity of their receipts and make these receipts generally acceptable as security 4 for loans. These licensed warehouses are not to be owned or operated by the State, but by individuals or companies as business enterprises. They aro, however, to be regularly inspected and carefully super-' vised by the Department of Agriculture! and this fact will give to warehouse receipts issued by licensed warehouses oi superior standing as collateral for loans, The bill does not compel warehousemen to become licensed. Any owner or operator of a warehouse may apply for a license and if tho warehouseman andl tho warehouse meet the conditions required by tho Act a license may b« issued. After becoming licensed the warehouse must be conducted in conformity with the Act and the rules and regulations promulgated by the Department of Agriculture. Warehousemen operating under licenses must keop a record of the commodities stored or withdraw. They must file with the Government and with the department statements under oath showing their financial condition from time to time. They must maintain their warehouses in proper condition. They will be subject at all times to inspection by representatives of the department entrusted with the administration of this particular Act. Ruie3 and regulations governing the operation of licensed warehouses are left to be prepared and promulgated by the Department of Agriculture. ENTERTAINMENTS INDEX. Opera House—Vaudeville and Revue. PICTURE THEATRES. National and Lyric—" Thg Far Cry" (.Blanche Sweet) and " Early to Wed." Strand—" An Exchange o? Wives " (Eleanor Boardman) and "Up and at 'Em" (Doris May). Tivoll and Everybody's—" Flight to North Pole," and "The Other Woman's Story." Majestic—" The Man on the Box " (Syd. Chaplin) and Orchestral Novelty. Princes—" Flight to North Pole," and " A Woman of the World." Prince Edward—" So This Is Marriage" (Eleanor Boardman) and " The Recreation of Brian Kent." Rlatto and Regent—" Desert Gold" and " New Brooms." Grand—" Charley's Aunt " (Syd-. Chaplin). DANCING. Dixieland—Dancing. (Entertainment Notices appear on Page 13.)