A GILT-EDGED INVESTMENT

New Zealand Times, Volume XLVII, Issue 10881, 22 April 1921, Page 4

A GILT-EDGED INVESTMENT

The stringency in the money market has furnished the average investor with some very tempting opportunities for the safe and profitable placing of his capital. None of them, however, can compare, in point of attractiveness, with the proposal which is placed before the public to-day by the New Zealand Farmers’ Co-operative Association of Canterbury (Ltd.). As a consequence of the severe fallsi in the values of some of our staple products, the association requires further capital for the assistance of farmers who are affected by the financial stringency, and on security of the most unquestionable character it has announced the immediate issue of £250,000 worth of bonds, repayable in five or ten years, bearing tho high rate of 7 h per cent, interest free of income tax. This is the. most generous and tempting offer that has been made to investors since the price ■of money advanced. As a matter of fact, the association is making Hie investor a sharer in the profit from the business as well as a lender of capital, and to this extent the proposal is sound] and enterprising. It is recog- 4 nised that in the emergency that has arisen the farmer must have assistance pending the realisation of his and tlieir; improvement in value. In the absence of agricultural banks, which would fulfil this function in .other conntries, it is the business of the New Zealand Farmers’ Co-operative Association of Canterbury to provide this financial assistance. It is not considered expedient to call up additional capital for this purpose at the present time, seeing that many of the shareholders on whom this call would be made are included amongst those who require temporary help. Hence’ the issue of these debentures, at a rate of interest that must appeal to the thrifty man with savings to invest. The security. behind the Association may well be described as gilt-edged, seeing that the share capital paid up Tr £887,512, the reserve fundi and undivided profits £209,423, and the uncalled., but subscribed capital £424,783, making in all £1,511,718. In addition to this, the increment in the Associa- ! tion’s property values amounts to £123,644 in excess- of book valuations. The New Zealand Fanners’ 00-operativ - Association of Canterbury has been in existence for thirty-nine years, and now embraces nearly 12,000 shareholders. It has consistently paid 81 per cent, on its customary capital, while the annual volume of business has reachedthe substantial total of £5,501,349. So much for tho security. Without ques tion, this is all that tho most exacting investor can ask for. There can be no doubt that the money is required for the best of all* purposes, which is the financing of the producing interest of the country through a period of unexpected emergency. If the interest is high, the occasion warrants the pay meat of the rate offered, and on this point the directors are well satisfied. We hear much of tire scarcity of mom- ; ey, but given a sufficiently attractive rate of interest, there is'still plenty of money in New Zealand available for investment. The Post Office Savings Bank alone, according to the latest returns, holds over forty millions sterling, and the question put to many of tho depositors by these debenture proposals is whether it would not be good business .to use some of this idle money for the financing of the formers of Canterbury, and, at the same time, enable it to earn 7\ per cent, free of income tax for the owner.