RURAL CREDIT BOARD

Otago Daily Times, Issue 21773, 12 October 1932, Page 5

RURAL CREDIT BOARD

CONFERENCE OF REPRESENTAr ' FIVES OPERATIONS OF THE SYSTEM ABOUT £1.000,000 LENT A conference of representatives of the Rural Intermediate Credit Board and the co-operative associations was held in the offices of the Public Trustee yesterday. M* John Brown (a member of the Central Board) presided, and there were' also present the deputy commissioner (Mr J, Snell), Messrs G. H. Elliffe (Dunedin), A. R. Jordan (Christchurch), ahd'jß. D. Newth (Invercargill ), district supervisors; Messrs W. O. M'Kcllar, ,R., Milne, R. B. Meek, and E. H. Mumey (delegate from Tapanui Association), Otago District Board; Messrs H. C. B. Withell

(chi Arman) rand E. J. O’Brien' (secretary). Mid-Canterbury Association; Messrs H. >C. Holgate (chairman), J. Christie, Ai A. Jensen, J. T. Walter (secretary); HI V. Uren (district officer), South Otago Association; Messrs D. Teviotdale' (chairman) and E. ‘H. J. Preston (secretary), Centra] Otago Association; Mr P. Amott (chairman), Eastern Southland Association, and Mr D. Wight, Mataura Association. MESSAGE PROM THE PRIME . MINISTER.

The following message from the Prime Minister (Mr 6. W. Forbes) was read byJVIr Snell:— “It affords me great pleasure to send a message of welcome to this conference of representatives jpf rural intermediate credit associations iand to express the hope that your discussions will be helpful and and will make for the more efficient and. satisfactory administration of the system: The conferences already held at Hamilton and Palmer ston North were very! successful, resulting in a number of suggestions and recommendations being made to the Rural Intermediates Credit Board for the improvement of the system,, and I feel sure that the results of the present conference will .be equally satisfactory to the association representatives and the board. Up to the present the volume of business transacted has not shown the same advance as in the North Island, this being probably due to the fact that the types of farming carried outran the South Island, are those which hive' suffered most under the existing dif|6ult conditions. j | SORK OP GREAT V^LUE. “The work which has already been done, however, will prove of great value as soon as conditions improve,, and the organisation which has been (Built up through the formation of associations and by ; i board will be immediately available to {applicants when the abnormal Conditions have' passed , apd the demand' for credit for further productive purposes is again evident. I would suggest also that any possibility of mstending your business on sound lineal even during the present circumstances Should be fully Explored at the and I feel sure that the members and officers of the board will give you every assistance. in: this direction. A “ I have\ closely watched the .’.drainistration of the system since its incepand haVe been impressed with the large atboonf of voluntary work whfyh has been carried out by directors aqd secretary-treasurers of associations aiid by the Public Trustee and his staff in setting up the necessary organisation and’ enabling the system to become a real factor in the provision of rural finance’ in the Dominion, The system when introduced was a novel one so far as this. country is concerned and was no doubt looked upon with some diffidence both by farmers and by the investing public, but it cap now be safely stated that the system has proved its usefulness and if it is developed on sound and prudent lines it should be capable of affording even more valuable assistance to farmers in the future. You will fully realise that the first requisite to the success of the system is the maintaining of a satisfactory flow of funds for investment in the board’s debentures and that if this is to be ; secured the confidence of .Investors in the methods of the. board and associations must be won and retained. ' ' ■ CHEERFUL ASSISTANCE.

“ Although the business of some assoclatious has preached such a' volume as to enable them to pay an . adequate remuneration for the services of secre-tary-treasurers, it remains true that in the case of most associations the services qt secretaries are cheerfully rendered at a remuneration which would be inacccptable on an ordinary commercial basis. The directors have also given generously of their time and ability to further the interests of the associations without thought of personal benefit, and on behalf of my colleagues in the Government and myself I desire Vto express my sincere appreciation of the valuable services gratuitously given. It is quite clear that but for these services the board would be unable to lend its moneys at the advantageous rate now enjoyed by the farmer

4 .CAREFUL CONTROL; “The fact that the •’associations are continuing to function in the difficult times through which the Dominion is

passing speaks well for the care and at- ■ tendon which have been ’ given to the \ choosing of accounts and,-their supervision after the loons have been granted. I am informed that three of the associations represented at this conference have unfortunately incurred losses, but I trust that the directors and members of the associations concerned will realise that such losses are largely attributable to the exceptional conditions now being experienced and are not in any way a reflection on the soundness of the rural inter mediate credit system. With a gradnn* improvement in conditions generally it is hoped that the affairs of the associawill be placed on an entirely satisfactory basis. r ROOM FOR EXPANSION.

“ In- conclusion, I would express the hope that this conference will prove in every way successful and that the discussions and interchange of opinions which will take place will prove helpful to those present, and- will result in benefit, ip the system as a whole. I litMe doubt that there is ample room for?-further.expansion in the districts controlled by the associations represented at this conference, and that there is Areo scope for the formation of further associations in those parts of the South Island which are not yet effectively supplied with facilities available under the system. Probably the existin'' conditions have served to retard the progress which might otherwise have been made during the past two years, but 1 am confident that with an improvement of farming conditions there will come a steady and satisfactory expansion of. the operations of the board and associations, in the southern portion of the , Dominion.” MOTION OF THANKS. Mr Withell moved—“ That this conference plabes om record its thanks for the encouraging message received from the Prime Minister and its appreciation of the interest artd support which he has accorded to the Rural Intermediate Credit, scheme and that a copy of this resolution be transmitted to the Prime Minister.”

The motion was seconded by Mr Meek, and-carried unanimously. . 3> ADDRESS BY MR BROWN. Mir,Brown, chairman of the conference, spoke.as follows: ; “It is my pleasant duty as a representative of the Rural -Intermediate Credit , Board to welcome j you to this conference, and to express the hope that it will result in benefit to the associations and to the board’s operations generally. You probably know that similar conferences were held recently at Hamilton and.i’almerston North,iand were presided over by other members of the board, the deputy commissioner (Mr J. Snell), who is here to-daiy, being also present. \\These conferences were much appreciated by the associations concerned, and there is no doubt that the discussions' which took place resulted in a better, understanding'of the system being obtained by the representatives of the associations. steady Advance in 1 business. “ Although 1 during the past year the board’s business has not shown the same rate of advancement as it did in previous years, this is largely attributable to the conditions w|ich have been ruling throughout the Dominion, and when those conditions' improve 1 have little doubt that the board’s business will also increase. Ido not propose to quote any figures to ybu to-day, as the board’s annual report will shortly be presented to Parliament, and will then be made available to all associations. I should like to say, however, that the business of associations generally is showing a steady advance, and more than twice as much business was • transacted through associations as was transacted under Part 111 of the Adt where loans are granted direct to farmers.; It would appear that the future success of the system will depend mainly oh the manner in which the association’s (business is conducted. FORTY-THREE ASSOCIATIONS. "There are now 43 associations in New Zealand, of which l 4l are in active operation, while the .other two should continence business iri"; the hear future. Eight of the associations are operating in the districts covered by this conference, and it is hoped that with even a slight improvement 'in farming conditions more associations’ will be formed in the South Island, because there is room not' only for expansion in the business of the existing associations, but for an increase in the number of associations in operation. A COMPARISON. “Hitherto the board’i-business has been confined largely to tltt North Island, and a comparatively eraa)l V amount has been transacted in the shuth. One or two of the associations have granted a satisfactory number of loans, but the others have not Shown the expansion which was expected of them. This may be due to other, causes than the present depression, antin' if the associations’ representatives ‘{here to-day have suggestions to make .for the improvement of the system with the object of increasing the business transacted, I ask them to put the suggestions forward freely, and I can assure them that full consideration will be given to them by the board as all the members have, an earnest desire to promote the success! of the system. Valuable suggestions h|ve already been received as a result, of tit 1 previous conferences, and it has been .found possible to adopt a number of ihese with consequent benefit to the working of the scheme. i NOTE OF APPRECIATION. " I can assure you that the board fully appreciates the splendid work tfhich has been done—much of it voluntarily and without thought of personal benefit —by the directors and secretaries ofdassociations. I should also like to place oil record the board’s appreciation >of the services which have been rendered by the Public Trustee and his officers who have had the difficult task of setting up an entirely new system. I consider that the work which they have done is deserving ,of high praise. I appeal to the officers 'and directors of the associations represented here to-day to continue the unselfish work which they are doing and to pdvance the interests of the system with corresponding benefit to the farmers in their districts.

ASPECTS OF ADMINISTRATION.

“I should now like to touch oH several particular aspects of the administration of the system. The board recently fopnd it possible to relax the restriction which it had placed. upon the purposes for whiih loans may be made; and loans will nofv be granted for the discharge of Existing liabilities, provided that the accounts offering are satisfactory in’.all respbctsl The restriction which the board previously placed upon the granting of loans, to : pay existing liabilities was necessary at, the time, but it is hoped that it will not require to be imposed again. I know that the associations will not indiscriminately grant loans to pay existing liabilities as it is necessary to ensure that only satisfactory accounts are obtained. On the successful administration of accounts i will depend the popularity of the, system so far as the investing public is concerned, and as without the confidence of investors the system cannot expand as it should, you will realise the vital necessity for sound administration in order to ensure that there is a satisfactory flow of funds for investment in the board’s debentures. COMMITMENTS MET. “ The board realised that with the unsatisfactory conditions prevailing in the farming industry at present, it would be necessary • to-grant concessions to some borrowers, and the board claims that its administration has been sympathetic, always having regard to the duty it owes to those who have entrusted funds to it for investment. It is gratifying to be able to report that the majority of the board’s borrowers have met their commitments satisfactorily, and the arrears of. interest owing as at the date of the last statement prepared were very small indeed in comparison with the volume of business transacted. It is the board’s aim, and I am sure the aim of associations, also, to “ nurse ” unsatisfactory accounts as far as can reasonably be done with the object of keeping farmers on the land and avoiding the loss involved in forced realisations.! EXTENSION OF LOAN PERIODS. Representations have been made to the board that the five years specified by the Rural Intermediate Credit Act within which loans should be fully repaid is too short a period within which to expect farmers generally to repay their loans. Special force is given to these contentions at the present time when, owing to the low prices received for our primary products, most farmers find it impossible to effect any appreciable reduction in their capital liabilities. The matter has become one of practical importance, since the maximum period allowed for the first loans granted by the board will shortly expire. While the board feels that it would be inadvisable to seek to have the legislation altered at the present moment, it has readily recognised that to insist on repayment of all loans which have been current for five years, and to adopt extreme measures, would seriously embarrass borrdwers. The board lias been advised that no’legal difficulty would arise by allowing such loans as are not repaid within the prescribed period to run on, and this will be adopted provided the security and conduct of the borrowers are satisfactory, and such repayments as they are reasonably able to make are made. In such cases the stock mortgages will require to be re-registered, but the expense ihvolved will be very small. ...

REVIEW OF ACCOUNTS. “ You have no doubt been advised recently of the board’s decision to suggest to all asociations that they should review periodically all .sheep-farming and grain-growing accounts and any dairying accounts which may he showing special difficulties. I am firmly of the opinion that the general adoption of this practice, particularly if associated with the system under which an annual budget of his estimated expenditure is compiled by each borrower in conjunction with the association’s directors or secretary, would have a beneficial effect, not only on the working of the associations, hut also on the position of the borrowers themselves. “ The hoard has recently issued a pamphlet containing information for intending borrowers in order to conserve as far as possible the time of the officers of the board and asociations in interviewing inquirers and supplying to them the necessary information. I am sure that these pamphlets will be of use and will he appreciated more especially by the secretaries of associations. EXTENSION OF POWERS.

“ The following extensions of the powers delegated to directors of associations have recently received the approval of the board and are now in operation:—

(a) Further advances of an urgent nature for essential seasonal expenditure such as shearing and harvesting

expenses and the expense of planting winter feed may now be granted by associations with the concurrence of district supervisors. (b) Association loans not exceeding £250 may, if they comply with the requirements imposed by the board, be granted by associations with the concurrence of committees of the district boards instead of it being necessary for the applications to be finally approved by meetings of the full district hoards. (c) The delegation in respect of the granting of re-advances of the proceeds of stock and produce sold was limited to £SO, but the board recently increased the amount concerned to £IOO, and re-advances up to that amount may now be granted without reference to the board or the commissioner. (d) The board at its last meeting agreed to delegate to associations the power to grant concessions to a limited extent if they have the approval of the district supervisor and one member of the-district board. Generally speaking, we are trying to loosen the conditions to allow the associations and the district boards to do more of the work. NEGLIGIBLE LOSSES.

“The board has been in operation for a period of close on five years and has in that time lent a considerable sum, approximating in all £1,000,000. The losses suffered by the board have been negligible compared with the large volume of business transacted, and it can be stated with confidence that although the present conditions are creating difficult problems in connection with the lending on stock, the 'position of the board’s accounts is very gratifying, and the prospect of losses of any considerable amount is at present remote.

“ I am very pleased, as representing the*board, to have this opportunity of meeting the directors and executives of associations which are performing such valuable work in connection with the scheme, and I wish to make is clear that any comment or criticisms of the scheme will be welcomed, provided they are of a constructive nature. The board has at all times been willing to give the fullest consideration to any representations made to it by those who are responsible for the management of the associations. I trust that our conference here will be a pleasant and profitable one, and that the Interchange of opinions and information will make for tho better working of the system in the districts represented.”—(Applause.) GENERAL DISCUSSION.

The conference went into committee to consider the remits which had been forwarded by the various associations dealing with different aspects of the scheme. ThSc associations’ representatives availed themselves to the fullest extent'of tin opportunity of discussing any difficultly} which they were experiencing in connection with their associations, with a view to ascertaining what would be the attitude of the board to various suggestions made by them. The discussion was most cordial in tone, and revealed the fact that the relations between the board and the associations, generally speaking, were excellent. A useful feature of the conference was the opportunity given to delegates of learning the latest decisions of the board on matters of policy, and it was evident that the information given was greatly appreciated, and would be of considerable assistance to them in the working of the scheme.

Great interest was manifested and it was made clear that the scheme was being supported by a large number of substantial farmers in the various districts, who were giving freely of their services and advice for the benefit of their fellow-farmers.

One fact which emerged from the discussion was the large extent to which the directors of the associations were assisting borrowers with their financial problems and giving them valuable advice tending to the improvement of the practical farming of their properties. The conference gives every promise of forwarding the work of the rural intermediate credit system in the South Island.