AGRICULTURAL CREDITS BILL.

Otago Witness, Issue 3870, 15 May 1928, Page 29

AGRICULTURAL CREDITS BILL.

SECOND READING CARRIED. RUGBY, May 9. The .second reading of the Agricultural Credits Bill was moved in the House of Commons to-day by Mr Walter Guinness, Minister of Agriculture. He said that to provide the necessary long and intermediate aid credits the Government was arranging to form -a land mortgage corporation, which would lend on mortgage, either on land' or on improvements. The corporation would be formed by a generous co-operation of the great banks, led by the Bank of England. These banks had arranged to put up £650,000 of paid-up capital. Mr Guinness spoke of the disinterested and patriotic attitude of the banks, because the return of their capital was to be limited to 5 per cent. *lt was obvious that £650,000 of capital would be far too little to finance the long-term needs of British agriculture, and it was proposed that the further money needed to lend to farmers should be raised by sales of debentures issued in the money market. These debentures, being dealt with on the Stock Exchange would allow the farmer to take a new source of credit. Mr A. V. Alexander moved the rejection of the Bill. He raised objection to granting a subsidy from the taxpayers without adequate information as to the economic position of the agriculturists. It would be more effective to stimulate the formation of co-operative credit societies under a State supervisor. Mr Walter Runciman said that the Government ought to be represented on the corporation. Mr Guinness said that the British banking system was in many ways a model to the world, but it had" undoubtedly neglected agriculture. The Governments of France, Germany, Scandinavian countries, the United States, and various dominions had taken special action to provide credit facilities for agriculture, but none of these systems was entirely applicable to Britain’s special needs. * The Government, in addition to underwriting and taking power to invest £1,500,000 in debentures, would also contribute £lO,OOO yearly for 10 years towards the administrative charges. It did not pretend that agricultural credits was the remedy for agricultural depression, but it filled a permanent need, enabling the farmer to mobilise his stock-in-trade and secure much-needed working capital. The Attorney-general had promised that the Government would consider the possibility of being represented upon the governing body of the corporation. The Bill did not attempt to restore capital lost in agriculture; it was an attempt to keep alive those who were alive. Long term credits were a great advantage because they were free from harassing alterations of mortgages.

The amendment was defeated by 233 votes to 106, and the Bill was read a second time.